If you’re one of the many homeowners who has a mortgage free or low mortgage home, then you can unlock a small fortune. Although many homeowners look forward to the day when they can burn their mortgage, the fact is we will all will release the equity in our homes as some point. Whether it’s an inheritance to your loved ones, supplementing your income, providing for some adventure or bailing you out of a jam. As long as you can maintain your desired lifestyle, then there’s no wrong reason to use the equity in your home.
Proper use of a mortgage makes good financial sense and can be part of a solid financial plan. One example would be to use the equity in your home to consolidate high interest debt. By consolidating all of one’s debts into a mortgage, you can lower your overall borrowing costs and set-up a practical financial plan to save for retirement and be debt free.
Another good use of a mortgage is to supplement retirement income. For those of us who want to continue living in our homes, but no longer have the financial means, there are a several options available. A line of credit or mortgage could be all it takes to provide enough money to live out our retirement years. Another option is a reverse mortgage or equity release mortgage. The program available by Aviva for example allows you to withdraw your money now or in stages and allows you to continue living in your home until you die or go into long term care.
Regardless of your circumstances don’t be afraid to use the equity in your home as part of your financial plan. Be sure to consult with an accredited mortgage professional and a trusted financial planner to determine your best solution.