Loans threaten homes

Home owners should be wary when mortgaging their home to buy shares says Hegney Property Valuations, managing director, Gavin Hegney.

Mr Hegney says there has been a surge in people taking out loans against the equity in their home to enter the stock market.

“These kind of loans did not exist a few years ago but now they are commonplace. It makes sense to buy quality shares provided share prices are rising but if they fall, then the home owner could lose a portion of the equity in their home.

“With real estate values rising recently, people believe they have stronger equity in their home to take out such a loan. However, they should remember that property rises have been sporadic.

“It is better to have all of the information and have a balanced decision, rather than rush into unnecessary risks,” Mr Hegney said.

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