If you are thinking about selling your home, you are going to want to take a look at some alternatives to equity release. Is a straight equity release the best thing for you? Now, you will look at all of those alternatives and explain to you why each one may work for you and more importantly what you should think about: downsizing and refinancing. Both of these are very simple and easy to do things that can make your home more affordable and save you thousands in interest.
Downturns in the housing market are not new and if you have looked at the statistics on how homes are being built now, you know there are areas of the country that have experienced this problem in certain areas more than others. Homes in places like New England or lower northern climates have been especially hard hit. Lowering prices and taking the time to sell is one thing, but what about taking the time to prepare your finances before selling and getting ready for your new home? An alternative to an equity release is getting prepared for a move and learning how to pay all of your moving costs.
Using the equity release to pay for your move is a great way to cut down on your expenses, especially when you are moving a long distance. You can find lenders who will provide a short term loan that will cover your moving costs, which is why it’s such a good idea to consult with your financial adviser. A financial adviser can help you manage your finances, as well as finding a great way to get out from underneath your current mortgage payments so you can enjoy life without all of the stresses that come along with multiple mortgages.
Another alternative is to refinance your current interest only mortgage into a more long-term interest-only mortgage. Although this may seem like a bad idea if you plan to stay in your home for the long-term, there are many benefits to using interest only mortgages when making your home improvements. First of all, a traditional interest-only mortgage has very high qualification standards and limits, which can make it difficult to get approved even for modest investments.
On the other hand, a traditional mortgage will require that you pay off the entire principle before you start receiving any benefits from your retirement interest. With an interest only mortgage, you can opt to keep the payment the same throughout the life of the loan until you reach the end of the term. This ensures that you’ll be able to save money each month on your payments because there won’t be any increase in the monthly mortgage payments. If you change your mind at some point in the future, or if the interest rate goes up, you can use the equity release as a fallback plan.
There are also other alternatives to a full equity release that you should consider carefully. For instance, if you already have a large amount of cash tied up in a second mortgage or a home equity line of credit, combining these loans into one loan with a single interest rate may be a great way to free up more money for yourself or for your family. By paying back a lump sum less than what you originally borrowed, you can free up cash that can be used for whatever purposes you see fit. As long as you have the appropriate income to qualify, this is a great way to increase your resources and achieve your financial goals.