What can you do to bubble-proof your home and protect yourself, regardless of what happens in the frenzied housing market?
A real estate bubble, simply put, is an unsustainable gain in home prices that can jeopardize resale value and equity.
Alex Koutouzis, senior vice president for Opteum Financial Services, one of the nation’s fastest-growing mortgage lenders, says, “The options really depend on your personal needs and situation, your risk tolerance and what you’re looking to achieve. If you’re refinancing, do you need to borrow 100 percent of the value of your home or can you leave some equity untapped in the event of a value declination in your community?”
The smartest move is obvious: Always buy a house you can afford and don’t overextend yourself. A good rule of thumb is that your housing costs (including principal, interest, property taxes and insurance) should not exceed 25 to 32 percent of your family’s gross income.
Here are some other smart tips to help you stay out of bubble trouble:
• Avoid borrowing against your home equity. Unless you bought your home years ago for peanuts and...
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