How To Leverage Your Home

Your home is likely your most significant investment, and it’s important to find ways to leverage it to your advantage. Leveraging your home can help you to access financial resources, make home improvements, and more. Here are some tips on how to leverage your home, as well as expert quotes from three professionals.

1. Home Equity Loans

One way to leverage your home is to take out a home equity loan. This is a loan that is secured by your home’s equity, which is the difference between what you owe on your mortgage and the current value of your home. Home equity loans can be used for a variety of purposes, such as home improvements, debt consolidation, or even to start a business.

According to Kyle Kamrooz, Co-Founder and Chief Strategy Officer of Cloudvirga, a digital mortgage point-of-sale software provider, “Homeowners can leverage their home equity for cash-out refinance, which could lower their interest rates, give them cash on hand, and still provide them with a mortgage payment they can afford.”

However, it’s important to be cautious when taking out a home equity loan. Make sure you can afford the payments and that you have a plan for how you will use the funds. You don’t want to put your home at risk by taking on too much debt.

2. Renting Out Your Property

Another way to leverage your home is to rent out part of it. If you have extra space, such as a basement or a guest house, you can rent it out on a short-term or long-term basis. This can help you to generate additional income, which you can use to pay down debt or make home improvements.

According to Andrew Helling, Founder and Editor of REthority.com, a real estate information website, “If you have a mother-in-law suite or finished basement, consider renting it out on Airbnb or a similar platform. Short-term rentals can often be more lucrative than long-term rentals, and you have the flexibility to choose when you want to rent it out.”

However, it’s important to check your local zoning laws and homeowner association rules before renting out your property. Some areas may have restrictions on short-term rentals, and you don’t want to run afoul of the law.

3. Refinancing Your Mortgage

Refinancing your mortgage is another way to leverage your home. This involves taking out a new mortgage with a lower interest rate, which can help you to save money on your monthly payments and over the life of the loan. Refinancing can also help you to access cash, which you can use for home improvements or other purposes.

According to Jeremy Sopko, CEO of Nations Lending Corporation, a mortgage lender, “Refinancing your mortgage is a great way to leverage your home for a lower monthly payment and potentially thousands of dollars in savings over the life of your loan. You can also leverage your equity for a cash-out refinance to access money for home improvements, debt consolidation, or other expenses.”

However, refinancing your mortgage can come with costs, such as application fees and closing costs. Make sure you understand the terms of the new mortgage and calculate the break-even point to make sure it’s worth the cost.

In conclusion, there are several ways to leverage your home to your advantage. Whether you take out a home equity loan, rent out part of your property, or refinance your mortgage, make sure you understand the risks and benefits of each option. With the right strategy, you can make your home work for you and achieve your financial goals.

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