There are several interesting techniques to maximize your homestead protection. For example, if your $200,000 home has $50,000 homestead protection and a $100,000 mortgage, you have $50,000 equity exposed to creditors. One way to shelter this $50,000 equity is to increase your mortgage from $100,000 to $150,000 and invest the $50,000 loan proceeds in other exempt assets, or you can protect the cash proceeds using the protective strategies we suggest to protect cash and liquid investments. Or if you have a substantial or unlimited homestead protection – as in Texas and Florida – a good strategy may be to refinance or sell your non-exempt assets, such as a vacation home, car or boat, and buy a home. Or you may improve your home or reduce your mortgage since your home is fully homestead protected regardless of value.
