After years of sounding like a voice in the wilderness, the numbers now prove what I've been saying: only money in the bank is like money in the bank. Home equity is not money in the bank.

A recent Wall Street Journal article said ""More than 40% of borrowers who took out a mortgage in 2006 -- when home prices peaked -- are under water. Prices have dropped so much in some parts of the U.S. that some borrowers who took out loans more than five years ago owe more than their home's value."

As I've been saying, those who store all their wealth within the four walls of their home are at risk in a tough economy like this one. I advocate a balanced approach to placing long-term savings in home equity along with other investment vehicles. A qualified financial advisor can help you diversify in an appropriate manner for your goals and circumstances.

Learn more about the role of your mortgage in your overall financial plan with this free article.

If you do not currently work with a financial advisor, I can make an introduction to one based on your criteria. Please call.

Jumbo mortgages (above $417,000) are still available, and pretty easy to get for those who qualify, including: 

• Large down payments - share the risk of ownership with the home owner.
• Great credit scores and credit history - only lend to someone with a history of paying back their obligations as agreed - on time.
• Documented Income showing the ability to repay the loan - if the IRS doesn't think you made the money, the lenders won't either.
• What is the house really worth? Expect a strict review of the appraisal, and the lender may even require two separate appraisals.

Lenders prefer that you also share the risk  of future interest rates - this means they will offer much better rates on Adjustable Rate Mortgages than on Fixed Rate Mortgages.

If you're having trouble securing a Jumbo Mortgage, you do have a few other options. 

Unlike the U.S., where the mainstay of the mortgage market is the 30-year fixed mortgage, the most common mortgage product in Canada is a five-year fixed rate mortgage (with a 25-year amortization period).

So what? Canadians are largely current on their mortgages (less than .5% delinquent) while roughly 10% of Americans are at least one payment behind.

With a Canadian-style mortgage (5 year fixed rate, and a 25 year amortization) you have to refinance your mortgage every five years - at the current market rates. This really lowers the lenders' risk since they are going to reset the interest rates and never be stuck with a loan at 5% when the market is at 10%.

The shorter amortization term makes the payment higher - making it harder to overspend on your house. Another example of how a mortgage plan that keeps you from overspending isn't a bad idea.