may seem like a money hog: mortgage payments, utilities, and maintenance. But
for those who have equity in their homes or the right property, your home may
actually be able to save or even make you money.
You may have
heard this already, but mortgage rates are currently at an all-time low. If you
haven’t refinanced yet or it has been several years, you may want to consider
doing it now. You can choose to extend the term of the loan at your current
payoff and lower your monthly payments or you can shorten the term and save in
interest over the length of the loan and pay your house off sooner.
Buying an Auto
If you are
one of the lucky few who qualify for 0%, you may want to rethink it and go with
an auto equity loan instead. Let’s say you are purchasing a $20,000 vehicle,
and you pay 0% over the course of 36 months, your payments would be $556 per
month. However, if you took a cash back incentive of $1,500, paid 2.99% with an
auto equity loan, your monthly payments would be $538, saving you $648 over the
term of the loan. Plus, you could possibly deduct the interest paid from your
taxes (consult your tax advisor).
Credit Card Alternative
repairs, tuition, vacations, weddings, and unexpected needs, it may seem like
the only thing to do is to reach for the credit card and just start piling on
the purchases. But before you start charging away, even if you have every
intention of paying it off quickly, you may want to look into a home equity line
of credit. With the current rates, if you aren’t able to pay the bill right
away, you won’t be paying as much in interest.
You may be
surprised how much having a non-energy efficient home is costing you. And while
making the necessary improvements may seem daunting and costly, even just a few
small changes can really have an impact on your monthly bills. Consider new
windows, replacing old appliances, or even adding solar panels. These
improvements can sometimes even provide tax incentives, so check with your tax
If you are
fortunate enough to live in an area that is attractive to renters (more urban
areas), consider utilizing a basement or unused 2nd
floor as a
rental unit. This will reduce your monthly mortgage payments and increase the
value of your home. Plus, after you’ve refinanced to a new low rate and pay off
your mortgage sooner, it will provide income sooner in life (that is if you are
comfortable being a landlord).
the term,” you have to spend money to make money,” right? Well, by spending
some money to improve your home especially adding to the square footage, you
can reap the benefits in equity as well as if you decide to sell. Research the
best bang for your buck for remodeling including where you spend the most money
i.e. kitchen and bathrooms as well as energy efficiency and additions. You may
decide to do the work yourself, but a professional could really help you with
plans to get the most out of your space, as well as keep resale as a main
priority instead of your tastes, if selling the home is your main goal.