Equity Rich, Cash Poor, and Black; Prime Target for
Equity Stripping
By DeShawna Whitmore
It has been a great run for home equity. In Las Vegas, Nevada, home values appreciated more than
20% on average in 2021 alone! That means the average homeowner in Las Vegas stood to make
equity gains in excess of $75,000 in a single year. This has homeowners seriously considering
cashing out their equity. How and why homeowners take out equity from their primary home matters.
This is especially important for Black homeowners because the housing industry has a history of stripping their home equity and leaving them barren and without wealth to pass on.
Homeownership has long been considered a cornerstone of stability and wealth generation in America. It is the gains in home equity that can significantly impact financial security. Unfortunately,
virtually all the gains Black homeowners made since discrimination was outlawed in 1968 were wiped out in the 2008 housing crisis; where Black homeowners were 70% more likely to get foreclosed on compared to white homeowners. Recently, home equity has been rapidly
accumulating for many homeowners ,and for Black homeowners still out there, that means the onslaught of advertising by lenders and others to get a piece of their equity is in full effect.
Homeowners must carefully consider the slew of financial offers bombarding them before acting on
any one of the options. From refinancing to equity sharing, HELOCs (Home Equity Line of Credit) to
Reverse Mortgages, knowledge is key. Each financial product has its pros and cons, and
understanding how that affects the individual homeowner is critical. Without understanding, the equity in the home, along with it the key benefits of homeownership, can easily be stripped away by erroneous fees, high interest rates, and high stakes.
While accessing equity and cashing in on the value built in a primary residence is not all together a bad idea, it is very important to have a plan for that money and to understand the cost associated
with accessing it. Refinancing can be a great opportunity to lower the mortgage interest rate and or
remove the mortgage insurance premium. A cash-out refinance or equity sharing, can be a viable way to make home improvements. A reverse mortgage can be used to keep seniors living in their own home comfortably.
These options can also lead to financial ruin and even foreclosure.
Before making any moves that will affect long-term wealth and stability, check out the libraries of
tools and information for consumer education offered by The Consumer Financial Protection
Bureau (CFPB), The U.S. Department of Housing and Urban Development (HUD), and The Federal
Reserve Board (FRB) and speak with a trusted, qualified professional that can help map out the benefits, pitfalls, and costs of accessing home equity.
About the Author: The above real estate information on equity stripping was provided by DeShawna Whitmore. DeShawna has been a REALTOR® for over 15 years, gladly sharing her knowledge and experience with other real estate enthusiasts and neighbors alike.
DeShawna Whitmore | REALTOR® | NV License #S.0070482.LLC | Realty One Group, Inc. | www.moreLVrealty.com | Dir: 702-743-5646
estate enthusiasts and neighbors alike
