Risk The House? No Way, No How!
Petrina's husband wants to mortgage the house to invest in his business. What big factor is he leaving out that could mean trouble?
QUESTION: Petrina is having an argument with her husband. He wants to mortgage their paid-for home to pay for their small business and get a good interest rate. He owes $130,000 on the business and makes $50,000 through it.
ANSWER: Not in a thousand years! I run a business and love what I do, but I won't put where my wife and kids sleep at risk. He's just looking at the numbers and not looking at the risk involved. When you mortgage the house, it changes the feeling of peace you have with a paid-for house. It will affect his ability to make money at the business. It affects his creativity. This is a standard mistake that many finance people are taught; just look at the numbers. But the problem is you leave out all the variables like the spiritual, emotional, and other things that will affect your life. Don't do this!