Did you know that if you own your home, you can use it to free up some extra cash? Here are three ways:
1. Sell and then buy something cheaper, or rent
- Sell and take the cash you get back to pay off your bills. Or, invest some or all of the money so it will grow
- Move to a smaller home, or move to a place where prices are lower. For example, your bills for property taxes, heat, hydro, and repairs may go down
- Rent to lower your costs. For example, you don't have property taxes and your landlord has to take care of most repairs for you.
2. Rent out all, part of your home, or other property
- Rent out your whole home for part of the year
- Rent out your basement or a room in your home
- Turn your home into a duplex and rent out one floor as an apartment
- Rent out a family cottage for part of the year.
With all of these options, you could invest some or all of the rent money you get. Before you rent any property, though, make sure you check with your local government. There are rules you must follow
3. Borrow back some of the savings you have in your home
If you have paid off some or all of your mortgage, you have a lot of money tied up in your home where you can't use it. You may be able to borrow back some of that cash if you need it. Options include:
- If you're over age 60, you may be able to get a loan that you don't have to pay back until you sell your home. This is called a reverse mortgage.
- You can also get a bank loan, a regular mortgage or a line of credit.
Remember: Your home may be a great source of extra cash
This is not the right move for everyone, though. It's important to think through your choices with care. You may also want to get some expert advice before you decide.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.