Possibly to help with mounting bills and maybe also for renovations. A lot of people want to fancy up their houses so they remortgage their homes to pay for it.

We did take out a small mortgage when we gutted our house a few years ago. But we knew we would have it paid off within two years and we were already mortgage free.

Don't forget a lot of people of my generation (those in their 60's) bought houses in the early 80's at 18% so the current rates of 3-4% is really cheap money. There are some who are remortgaging their homes to help their own children to pay off student debt or to help them with their own down payments.

I heard an opinion piece on the radio the other day about some parents who are jeopardizing their own retirement to help their children which is not a good idea.

In Canada the majority of our health costs are covered so that isn't as big a worry for us but my mom has developed Alzheimers and has had to go into private care at $9000 a month, it's a good thing she has the money. (For a variety of reasons she didn't qualify for gov't assisted accommodations of which the cost is only based on monthly income and not assets)

I'm starting to be concerned as well. I'm in the insurance business and if a customer refinances I generally have to make a change to their home policy to reflect a change of mortgagee and loan number. Refi's are up and loan amounts are increasing. I'm also hearing on our am radio station that we listen to at work the constant commercials for paying off credit card debt with a refi. I'm also hearing that our vets can take out up to 120% of the home value. If this keeps up we will be seeing what happened in 2008 happen again.

I'm not worried about what other's do with their money, I'm concerned that the actions of the lenders/consumers will affect my property values again and just in time for retirement.

My brother has is own mortgage company, he's a broker. He is turning down request to pull out equity to pay off debt. He's seen it once and doesn't want to see people in the position again.

Have you seen the movie "The Big Short"? Kind of scary.

When I renewed my mortgage four years ago, my banker couldn't believe that I refused to take out a home equity line of credit. "But you can buy a car or boat and do home repairs and take a vacation!" Hmmm. That's nice. But I'll pay off my house first then save money for all those things.

Tying up equity in a house isn't usually a wise financial decision. Those who refi to then deploy the money into other investments usually do well, returns in the stock market over time (as an example) exceed current borrowing rates. Others refi to pay off debt at higher rates, also a good idea.. (And avoiding the "other debt" altogether is a better idea). Or they refi simply to do other things with the money. An account (home equity) that's only added to and never withdrawn doesn't do anyone any good.

Very frequently, decisions to buy/sell/borrow/stay or not, that people make concerning where they live, are driven by emotion and personal considerations and not rational financial analysis. That's fine, but it's also why I think it's wrong to think of one's personal home as being an investment.

Chloe -- What 'other people' do with their money is a reflection of our economy. I'm interested in the trend and why it is happening. I wonder if fewer people are able to meet their obligations without putting their homes at risk. I know Americans are weak in history, but gosh -- the crash was less than a decade ago, and many people have just gotten their heads above water -- or have not.

chisue, remember that the readers of this forum come from vastly different circumstances and locations. For people of middle class means, the urban and near urban areas of both coasts have been booming for the past 10 years and real estate prices have increased significantly. While that's been happening for many, lower income areas and the vast rural and small town midsection of the country have been struggling.

Coastal California (Bay Area and coastal SoCal) real estate, just as in areas surrounding so many Eastern cities, has skyrocketed in value. Isn't the story the same in and near Chicago?

Just before the last crash my brother took out a HELOC on his house, the one going up in value in California and started another new business, which did not make as much as he thought it would as fast as he liked. :0) He called me and yelled about needing a loan...which he would pay back if he ever got that kind of money. lol Uh...no. He turns 70 this September, still working...unable to retire.

I'm worried right along with you chisue.

Borrowing home equity to start a business is a high risk proposition in the best of times. It's like wagering all the money you have with you in your last bet before leaving a casino - all or nothing. It's not a good choice to make.

I've lived in this house for nearly 33 years. When we bought the house, it had an adjustable rate mortgage - I think the interest rate was about 11%. Over the years, interest rates went down. At one point, with two children in college, our credit card debt was WAY too high - it was for things like tires, car batteries, airplane tickets for children to come home from college - you name it, but it wasn't for luxury living. We refinanced our house (which had a VERY small mortgage), and paid off every single credit card. We have never not paid a credit card in full since!

We refinanced another time for some delayed maintenance on the house. Then my husband died and I had more delayed maintenance that I could not get out of my monthly income - refinanced yet again. And a year ago, I did it again and redid my kitchen.

All have been very good deals for me. I was able to maintain and improve my property, thus protecting my investment. At no time was the mortgage higher than 1/3 the market value of the house. Every time, my monthly payment was lowered or remained the same with a big cash-out. ALL refinancing has been fixed rate, and for 15 years. I can easily afford my mortgage payment, taxes and insurance.

Every situation is different. I know many people who refinanced in order to pay for college for their children, back in the 90's. They have no regrets.

The biggest question is if it's to pay off credit card debt, with the people change their ways and never again accumulate credit card debt? We were able to do so, but many go right back to living beyond their means.

Could I end up upside down in my mortgage? Well, I suppose anything can happen, but if things got that bad, I'd be in big trouble one way or another as my home would have little value. I'm assuming that Armageddon is not going to happen.

We have re-fied two times, both times to lower our interest rate. Our rate is a 15 year loan at 2.5%. We pay an extra 400.00 so the loan will be paid off faster than 15 years. We could pay it off now with cash, but choose to take the mortgage interest tax deduction. As for the real estate values in Chicago, Elmer, I don't see them bouncing back like in the peak times. Chisue can correct me if I'm wrong, but I read the real estate section and see some very nice homes reasonably priced. I can't say what prices are like in the actual city, but suburban prices seem affordable. I did see my Mom's across the street neighbor's house just sold for 350,000.00 last month. It's a ranch, all brick, on a quiet suburban street. Probably about 40 years old.

This is a little off topic, but I wondering what everyone thinks of reverse mortgages. I have 2 extended family members in their late 70's that did this to supplement their retirement and both are very happy. It seems as though a person's house being paid off would help the family if extended care in a facility was ever needed. I wonder how they could get the very expensive care or treatments they might need if a very serious health crisis were to arise and they no longer have home equity.

chisue, I share your interest in wanting to understand macro trends be it financial, political, social, etc.

two25acres, I remember seeing signs offering loans @ 110% the value of your home back in the mid 2000s and we know how that turned out for many. We had three foreclosures in our sub-division during that period and these homes are still unoccupied. All have been vandalized and are under going extensive remodeling to get back on the market. I remember talking to a new neighbor buying in at the top of the market and them saying to me, "We never thought we'd be able to afford a home like this." Well, it turns out they couldn't.

I borrowed against my house--took a HELOC--last year to remodel my kitchen. It was for me an excellent decision. I am in the last few months of paying it off and have meanwhile thoroughly enjoyed the new kitchen. Essentially, it worked out about the same as refinancing and taking out money for the project. As it is, it just meant that I paid the HELOC off rather than pay the mortgage down for awhile. Soon I'll be back to paying the mortgage down--should be done within 3 years now.

The Chicago RE market has lagged the nation. It doesn't help that the whole state is a financial disaster.

There's no market for the many large, expensive homes in my town north of Chicago. The house across the street from us (older, extended in odd ways) sold in 2006. That owner's job moved after the crash. He finally sold 18 months ago for half of his purchase price. A nicer, newer (2002) home next door to that house has been for sale for four years at 75% of its purchase price.

I only realized how close to the edge some people sail during the RE crash. You could buy an architecturally significant lakefront mansion for dimes on the dollar here -- from desperate owners or, later, their bank. The over-leveraged lost, but so did the banks and everyone else needing to sell for more benign reasons.

We are the 'small potatoes' in this affluent community, having bought a teardown at the *edge* of 'historic' and 'significant' and building 2900 sq ft in 2001. What 'other people' are doing will affect us. I'm seeing some movement, but a reading of "Chilly" isn't a lot more encouraging than "Cold".

Some people considering getting a mortgage should consider how they'd manage (without sweating blood) were interest rates to go up to, say ... double current rates?

You've been hearing for some time how the Fed rate will have to go up ... some time soon ... but not quite yet.

I remember mortgage rates at around 18%, some thirty plus years ago - Canada Savings Bonds were offering 19%, for one year, around 1980.

I've been wondering about asking some of the buyers/orderers of the big houses on big estates whom they figure they may be able to sell to, in 20 - 30 years ... since many of today's college grads are able to find only low-paying employment, and are living in their parents' basements.

Mr. Trump says that he's going to bring a lot of the jobs back ... but only a portion of the lost jobs were shifted over-border/-seas: many disappeared into thin air, due to advanced mechanization, robotics, etc.

I'm sad when I see my neighbor homeless, due to foreclosure on an over-large house ... and I remember Dad's saying, years ago, "Some folks' eyes are bigger than their stomach" (i.e. stomach's capacity).

ole joyful