Home equity in most areas of the country has declined by 40% or more and it probably would take some time before the value would increase just like the stock market.
You may be considering selling your home and taking advantage of the low prices in your neighborhood. But that could be a mistake.
Your home is nothing like a stock market investment. While you can trade stocks, you will find it quite hard to trade homes as these are considered capital investments. The tax consequences that come with you giving up your home would also be quite costly.
If you are considering selling your home there is one negative side to this. The right time to sell a home was approximately 2 years ago and you are just caught up in an unfortunate situation. Like the stock market, home prices will stabilized and your home value will continue to grow in the future.
How to turn your home into an investment and able to use this to get money?
Your home is an investment. Your home equity will most likely increase in the future and you will be able to leave the house to your kids as inheritance or even tap into its equity upon retirement.
If you still have enough money to make monthly mortgage contributions and you do not have an immediate need to get cash, time is surely on your side and now is the perfect time for you to be consistent in paying for your mortgage.
So what are the best ways to turn your home into an investment?
One, you can allow your home equity to build up. Once your home is fully paid off, you may apply for a reverse mortgage on your property and use the money when you retire.
Paying off your home before you retire means you have to spend more or follow the biweekly method to accelerate payments.
Another way of looking at you home as an investment is to fully pay off your home and rent this out. You can then think off buying a second property. In this way you could collect cash for life.
Three, your retirement savings does not necessarily have to suffer when you work on paying off your mortgage early. If you plan your finances well and the value of your home increases through time, you can sell your home when you retire, buy a new one at a lower cost, and save the difference as extra funds.
It is understandable that sometimes given your lifestyle, at the end of the month, there almost is nothing to save. When you pay off your mortgage before you retire and buy a cheaper property when you retire automatically generates savings.
This may not be the best financial strategy but is certainly one way of accumulating retirement savings.
Finally the best way to pay off your home before retirement is using a mortgage acceleration strategy.
B y making use of this strategy, you will be able to get 13 years off your mortgage account and save a huge amount without having to refinance your home or change your lifestyle. Thats as good as spending less and getting rid of your mortgage dues sooner. Now tell me if that is not a great investment! With your home fully paid off, you wont have to use your retirement savings in paying for mortgage at all!