Stripper
 |
Definition of 'Stripper'Slang for an individual homeowner who strips the equity out of his or her home through mortgage refinancing. The proceeds are generally not re-invested, but spent on consumer goods. |
 |
Investopedia explains 'Stripper'Most people get rich by saving and investing wisely. Strippers, on the other hand, feel rich because they have increased their disposable income by going further into debt.Strippers face two huge risks. First, they are trusting that the value of their home will keep rising, but any dip in the housing market will prevent future refinancings. Second, strippers usually borrow when interest rates are low. If they have a variable-rate mortgage and rates rise again (as they always do), they might not be able to afford the mortgage payment. Sooner or later, strippers will have to reduce their consumption and start saving to pay back loans. This situation is a vicious cycle because the deeper into debt a person goes, the harder it is to get back in the black. |
Related Definitions
Articles Of Interest
-
The Importance Of Your Credit Rating
A great starting point for learning what a credit score is, how it is calculated and why it is so important. -
Mortgages: Fixed-Rate Versus Adjustable-Rate
Both of these have advantages and disadvantages depending on your financial needs and prospects. -
When (And When Not) To Refinance Your Mortgage
There are both good and bad reasons to refinance. Learn more about both here. -
The Indiana Jones Guide To Getting Ahead
Follow Indy's advice to conquer the obstacles blocking your path to financial well-being. -
Benefits Of Paying Off Your Mortgage
Paying off your mortgage in a reasonable amount of time can result in financial security and freedom. -
What About Canada's Housing Bubble?
Canadians may want to take a closer look at their housing market, lest it experience the same problems as the United States'. -
Protect Your Personal Assets
A family limited partnership (FLP) can go a long way toward securing your family's property. -
I want to transfer my house title to my child, what are the costs and tax consequences of doing so?
The costs associated with a deed transfer will vary by state and by how the transfer is accomplished. Filing a deed yourself may be the cheapest method, but it will require quite a bit of homework ... -
The Alphabet Soup Of Credit Derivative Indexes
Find out how these instruments work and how they are used in the market. -
The Income Property: Your Late-In-Life Retirement Plan
You're nearing retirement age and you don't have the nest egg you need. Here's how an income property can help you make up the shortfall.
Free Annual Reports
