Four Things You Could Do With Your Home
Your Most Valuable Asset
If you are in a season of your life where you realize you haven’t made such good financial decisions, it’s not too late. You may have a lot of consumer debt (car notes, student loans, credit cards, and personal loans) and that’s kept you broke. Even though your home is your most expensive asset, you probably don’t own it outright. You may still be paying on your first mortgages, a refinanced home, or a second mortgage. Your home is in your name, but it’s not really yours- yet. Miss enough mortgage payment and lose all those years of investment. The bank, your mortgage company, owns your home. They dictate the terms.
You have basically two things you have to do: spend less money (including reducing your debt) and make more money (to accelerate debt repayment). There are several ways you can go about doing it. Here are a few, with regard to your home.
Option 1
If you want to keep it your home, you can make more concerted efforts to reduce unnecessary spending to free up extra cash, refinancing for a better interest rate and term, make extra payments towards your principal. By doing this, you can save tens of thousands of dollars in interest and knock years off the term of your loan.
Option 2
If you don’t mind sharing your space, you can make extra money by renting out a room or basement to a boarder (or boarders). This can be a college
student, a single adult, a single parent, or even a couple. If you have a separate entrance and no need to share common spaces, it may carry the feel of an apartment and you can likely charge a lot more than you would if you were just renting out a room.
Option 3
If you don’t mind being a landlord, you can make money by renting your house to others. It can be rented to a single tenant or multiple tenants- depending on the structure of your home. If you don’t like the idea of property management, you can pay someone to do that part for you. Just rent your home for an amount that makes it worth your while.
Option 4
If you aren’t interested in keeping your home, you could aggressively reduce the amount of your debt by selling your home and moving into an apartment or moving in with someone else. You could use any profit on the sale of your home, to pay down debt or to save for whatever comes next. If you can move in with someone, you won’t have as much privacy, but it may end up saving you the most. If you sell your home, you don’t just get rid of your mortgage; you also get rid of property taxes, property insurance, gas and electric bills, water bill, home warranties, alarm system, etc. You could end up saving two or three times the amount of your mortgage.
Conclusion
Take some time and think about your financial goals. Consider whether a reset might help you. People have had great success with these strategies. You can take it slow or you can fast track-it. There’s no one right way for ever
