Your home price is plunging right now - what can you do to protect your biggest financial asset?
Ashley Parker
Jun. 14, 2007

The declining home prices are a major problem for all of us. The biggest asset in your life is your home equity – not just your home. You carry that equity from home to home. You retire with a large home equity.

You must learn to protect your home equity. The recession is imminent no matter what those Wall Street gurus say. Real estate trouble always precedes massive economic downturn. You must pay down your loans. As your home price is going down, your real estate tax should also go down. Meet your local township tax assessor. Explain that the current value of your home well below the last assessment done few tears backs. Negotiate as much as you can. Find the path to appeal the tax assessment. Every dollar saved in real estate taxes should be used to pay of the mortgages. It will just enhance the equity in your home.

Refinance to an adjustable arm loan. During recession, the Fed will lower rates sharply. Like in Japan, the US economy can experience deflation. The one-year Tbill rates can drop to zero percent or close to that in the next several years. The rates most likely will stay there for decades like in Japan. Japan faced deflation because of excessive borrowing. If you get a one-year arm linked to the one year Tbill, you will be a winner. Please ask your accountant to calculate how much you save every year. Take that money and pay off you loan to increase your home equity.

Look for better and cheaper home insurance. If you or your spouse belongs to any union or professional or other group, you may get a cheaper and far better home insurance. Again every penny you save in insurance, pay off your mortgage.

If you receive any residential tax rebate fro your state, use the same to pay off your mortgage.

The biggest savings will come from lower real estate taxes. I can give you some tips. It will worthwhile taking a real estate tax assessment course that your tax assessor took. If you are a senior citizen or veteran, you qualify for lower real estate tax. If you can have five or more acres of farm lard, you pay miniscule taxes in many states. Look at the rules for woodlands. If you use your home for religious purpose of the community, you can lower the real estate taxes. Please remember, you will have to prove these to the tax assessor.

I myself took a real estate tax assessment course. That has helped a lot in talking to my tax assessor.

Your home price is plunging right now - what can you do to protect your biggest financial asset?
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