Appreciating vs. Depreciating Assets

October 3, 2018 by Jacob Sensiba Leave a Comment

I think it’s widely known that there are two types of assets: appreciating and depreciating. I think it’s less known what each of these means and why they are used.

I this article we will look at what each term means, examples of each, and how to use them effectively.

What’s appreciation?

Appreciation is the increase in value. The majority of assets used to accumulate and grow wealth are appreciable.

What’s depreciation?

Depreciation is the exact opposite. It’s the loss of value. The most common example is a car, but more on that later.

Appreciating assets

Stocks – It’s commonly known that investing in stocks is the best way to not only keep pace with inflation but to grow your wealth. A stock is a partial ownership in a public company. Popular examples include Apple, Amazon, Facebook, etc. (Click here to learn more about stocks)
Real estate – Single family homes, duplexes, apartment complexes, etc. Though the pace at which real estate appreciates dwarfs compared to stocks, it does so slightly over time. (Source)
Private equity – This can be starting a company of your own or you can invest in a startup. There are also private equity funds that exist, as well.
Alternative – Less common assets that could appreciate (cryptocurrencies, precious metals, art, and other collectibles)

Depreciating assets

Cars
Boats
Furniture
Equipment
Patents/Copyrights

What’s the point?

Appreciating assets – Owning and investing money in an appreciating asset is the key driver in growing your wealth. Those who’ve accumulated significant amounts of wealth have done so by earning a living, saving, and investing diligently over decades.
Depreciating assets – There are a few reasons to own a depreciating asset.
- Fun and convenience – We own and drive cars because we need them to go places. We buy boast because they are fun. In either case, you could also own a car or boat for your business, in which case it would serve a different purpose.
- Business – Owning and operating machinery and equipment is how many of us make a living or run a business.
- Tax write off – If you use equipment or machinery for your business, often times you can use the depreciation of that equipment as a tax write off. Be advised: talk to your accountant about specifics.

Conclusion

Appreciating and depreciating assets both serve a purpose. It’s important to know the difference between the two and how to use each one effectively.

For more information about appreciating or depreciating assets, and for our disclosures, visit our website www.crgfinancialservices.com.

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Must Know Tips When Buying and Selling a House

July 11, 2018 by Jacob Sensiba Leave a Comment

Seeing as the housing market is incredibly hot right now, I found it appropriate to talk about buying and selling a house.

This is a very big decision and can be an extremely stressful endeavor. You can alleviate some of that stress if you know what to do and what to expect.

Buying

Do your homework

Whether you are building new or buying an existing property, you need to do your homework. Hire reputable contractors, realtors, inspectors, etc. You can cheap out with these services, but over the long-term, it’ll cost you.

Always do the inspection

This is a must, must! The inspection can save you so much money! Say you visit a house and love it, but want to get in ASAP, so you skip the inspection. After a few months, you notice some significant shifting and cracking.

Guess what, you need your foundation fixed. That could run you, depending on the severity of the issue, $20,000 or more.

Another example and costly example would be a roof replacement.

Not only can it save you money, but some issues found in the inspection can be added to your contract. If the inspector comes back with some issues, you can include that in your amended contract, and have the seller fix whatever the issue is before closing.

Finances

There are many financial conditions that come into play when buying a house.

Hidden costs – Inspection, appraisal, down payment, earnest money, etc.
- Once you own it – property taxes, insurance, utilities, maintenance, etc.
Pre-approval – Get this done by a lender before you buy. If you have a pre-approval when you make an offer, your offer is more competitive
Improve your credit – Having your credit in the best possible condition is a must. A higher credit rating can lower your rate and could increase the amount you’re approved for.
Stay on budget – Don’t buy more house than you can afford. Live within your means and look for a price that’s below your pre-approval amount.
Avoid big purchases and new credit – This goes along with the rate you get and the approval process.
Debt/income ratio – This is one of the big parts in the approval process for your mortgage. The lender compares your income to all of your outstanding debt, along with what your possible mortgage payment will be. Income/debt ratio should be 43% or below.
What you need – W2s, tax returns, paycheck stubs, verification of employment

Selling

Clean and declutter

Make your home spotless. Vacuum and put lines in the carpet if you can. Sweep and scrub floors. Clean windows. Make sure the kitchen and bathrooms are especially clean.

Take pictures and art off of the walls, and leave minimal amounts of furniture. People want to walk into a home and imagine their art and their furniture. They want to “make themselves at home,” and imagine what it would be like if they lived there.

Fix the big issues

This could come out during the inspection too, but fix blatant, big issues. Roof repairs/replacement, furnaces, air conditioning units, etc. The goal is for someone to buy your house, so if you have the big issues taken care of, people have fewer excuses to say yes.

Curb appeal

Trim the hedging, cut the grasses, and make that garden look perfect. You need people to say wow before they walk in. If they love the house before they step inside, they’ll be in a better state of mind going in.

If your yard is ugly and they know it, they’ve already been disappointed, and everything they see inside won’t be as impressive.

Get the word out

Put that house on every and any social media, website, etc. as you can. Hopefully, your realtor does a lot of this for you, but the more people know about it the better.

Make sure you tell your neighbors also because the people who buy your house will, obviously, be living next to your neighbors. They want good people next door. Preferably, someone they know and trust.

Conclusion

Buying and/or selling a home is a very important decision, and probably the biggest purchase you’ll ever make.

Use these tips to help you through the process.

To learn more about the financial aspect of buying or selling a home, and for our disclosures, visit www.crgfinancialservices.com.

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Getting Ready to Buy Your First Home

August 22, 2017 by james Leave a Comment

Getting financially prepared to buy your first home can be complex and potentially confusing to the uninitiated. But take a little time to familiarize yourself with the process and get some timely and targeted free advice from mortgage consulting groups like On Q Financial, and you can successfully navigate your way to home ownership.

Here are some key factors to take into consideration as you move to prepare yourself financially for your first home purchase:

1. Time Things Right

Don’t try to buy your first home until you are financially ready to do so. Having a defaulted mortgage on your record can be a hindrance for the second time you attempt to buy a home. Make sure you have the monthly income and enough savings to proceed. And it’s generally best to only buy a home if you think you will live there 5 years or longer (otherwise you may want to rent.)

2. Don’t Become “House Poor!”

It’s one thing to buy a home as an investment so you can quickly turn around and sell it. But if you are planning on living there for any length of time, make sure you house payment is less than 30% of your monthly income. There are exceptions on the exact number, but the point is you don’t want to scrimp on food, gas, bills, and other necessities in order to make your house payments.

3. Plan for Your Down Payment

It’s possible to get a mortgage without a down payment or with a very low one. It’s even possible to get financial assistance for your down payment. Usually, however, you need from 3.5% to 20% down. That’s a substantial chunk of change, with most house prices, but it can be worth it. It will lower what you owe and the total interest you pay on it over the years. And if you put less than 20% down, you will likely have to make PMI (private mortgage insurance) payments to the lending bank along with your house payment.

4. Get Pre-approved When House Shopping

You’ll want to find out your credit score and find ways of improving it quickly, if possible. You’ll need to collect pay stubs, W2 forms, checking and savings account statements, tax returns, and other documentation. This and other information will be used to get you pre-approved for a mortgage within a specific price range, which will put you in a much better position to buy the right home when you come across it (and to show the seller you are serious and good for it).

5. Get Sound Mortgage Advice

There is a plethora of mortgage options these days, and you can often “customize” a mortgage that fits your exact situation. But it can be very confusing to those not familiar with the process. Should I take out a 30 or a 20 year mortgage? Should I opt for fixed or adjustable rate? Where will I get the financing for my mortgage at the best possible interest rate? Talk to a mortgage consulting firm that will “simplify” the process for you and help you make the right decision.

The Road to Securing a Home Loan

July 11, 2017 by Ashley Leave a Comment

Now that the housing situation is bouncing back from the 2008 collapse, home loans are once again becoming a viable investment. In order to help you expedite the process and get through it mostly stress-free, this article will list the pathway to take. Furthermore, to ensure that you’re getting the best deal, our advice is to compare home loans online and make notes of the interest rates and term lengths.

Find Out Your Credit Score

The first order of business is to obtain copies of your credit score. You need to know what interest rate bracket you reside in, so that you can strengthen your position when the loan rates start coming in. There are, of course, other general benefits: you can discern whether you’ve been the victim of identity theft, locate any discrepancies, etc. Doing the latter and fixing any errors can even raise your FICO score and make you eligible for better offers.

Usually, lenders won’t look twice at your loan petition if your credit score isn’t 680 and above – although FHA mortgage loans start at 620. There are other alternatives, however – it’s just that these numbers represent the cut-off for conventional loans.

You can get a free copy of your credit reports every single year via federal law. Head to the website AnnualCreditReport.com to apply for your report. You can request both a paper copy, and the right to see it online.

Be Disciplined With Your Money

Before you start setting up in-person appointments for your home loan, you’d better have saved up some cash. Even if you’re going with a reliable online lender, most mortgage loans these days require a down payment – especially after the housing collapse of 2008, when subprime borrowers reneged on their commitments – banks and sole proprietors alike. A good rule of thumb is to have 20% of the total if you can, to alleviate the monthly payments. A minimum of 3.5% will often get you through, however.

Rectify Outstanding Debts – Pay on Time!

Point-blank: the less money you owe preexisting creditors, the better your chances of securing a mortgage loan that you can be happy with. Of course, it’s okay to have some outstanding debt; but keep in mind that your debt-to-income ratio is a considerable factor in evaluating your credit score. The less debt you have, or the more income you have, the better.

As a guideline, potential lenders really like it if the debts for which you are responsible each month don’t exceed 36% of your take-home monthly pay. Also, keep in mind that soft credit checks are an ongoing thing, so keep abreast of your bills even as you’re getting approved.

What Home Can You Actually Afford?

This happens all the time – people don’t use the widely available mortgage and debt calculators online, and end up buying a home that really taxes their ability to pay each month. Don’t be one of these people, as restructuring can come with extra costs, time, and headache. Never allow a lender to tell you what you can spend; if the amount is too much, make sure you get it down to the level you want; this isn’t free money, and you’ll be paying it back anyway.

How to Handle the Emerging Trends Shaping the UK Real Estate Investment Today

June 26, 2017 by Ashley Leave a Comment

With the property market slowing down thanks to Brexit related concerns, property investors in the UK need to know the necessary moves to make if they want to avoid being left high and dry. But Brexit isn’t the only influencer affecting the UK’s real estate.

Even though things are changing and prospects might seem a little bit grim, there is still profit to be made by UK property owners. But to avoid investing wrongly and losing, an investor must ensure to do the following in order to properly handle the trends that are currently shaping the UK’s real estate market.

Stay up to date

Things are changing daily as new information concerning Brexit and other matter come to light. To avoid getting finances stuck in a non-profitable real estate venture, investors will be smart to stay updated concerning any new information that might affect the real estate market. By monitoring the unfolding of events, investors will be able to make informed decisions that increases their chances of profiting while minimizing their chances of loss. For example, an investor that is aware of the updates to landlord tax relief will know if he/she qualifies for tax exemptions or how much more tax he/she has to pay.

Embrace technology

Landlords and investors need to start making use of every tool available to them in order to be able to get the best results from their investments. By making use of mobile apps and as well as internet platforms that have been designed to help landlords advertise properties and other things, a property owner will find it easier to react to unexpected legislation or other factors that might affect enjoyment of the property.

Because technology is obviously impacting how people lease, occupy, buy, and value real estate, investors and landlords will find it easier to provide better access to buyers or tenants if they embrace technology.

Go green

To take advantage of the going green trend, UK property investors can make their properties more attractive by redesigning them to have less of a carbon footprint. A more environmentally friendly property will be more attractive to a new wave of tenants and buyers.

Consider investing abroad

It is believed that while Brexit is being finalised and even after it has been finalised, that the UK real estate market will experience a more pronounced downturn as the market becomes an underperformer while that of the rest of the EU soars. According to PWC, “…92% of survey respondents say UK investment will fall in 2017… 48% believe there will be increase in investment into the rest of the EU…” Thus, UK property owners can look to diversify their investments by experimenting with investments in the EU real estate market

Trends come and go but real estate trends tend to leave an impression after they have passed. By using the above tips, investors and landlords can ensure to some degree that the impression left after the present trends have passed will be a positive one for them, rather than a negative one.

Here Are 5 Things You Need to Consider Before Becoming a Landlord

February 23, 2017 by Ashley Leave a Comment

Does the idea of extra income from a fairly flexible source appeal to you? Becoming a landlord can be an excellent way to tap into an extra or full-time revenue stream, but there are many challenges to consider before committing. The number of renter households in the U.S. grew by 9 million between 2005 and 2015—which is the highest decade-long growth since 1965, as Investopedia cites based off of a Harvard study. Demand is only expected to climb moving forward, so it makes sense to starting thinking about the upsides and downsides of becoming a landlord now before making any moves.

Choosing the Right Property

Chances are you’ve seen a television show in passing that features hosts taking a chance on a “fixer upper,” renovating it, and flipping it for a cushy profit margin. While these programs are entertaining, the reality of finding the right property and making it safe, legal, and appealing to tenants entails a lot more elbow grease. When you’re shopping for the right property to get you started, these factors are the bare minimum to consider:

-Neighborhood

-Tax rates

-Schools

-Safety

-Nearby vacancies

-Average rent for area

-Necessary insurance

-Condition of property

Location Affects Risk and Returns

Purchasing and renting out a house in a cutthroat market like San Francisco or New York City is going to look a lot different from becoming a landlord in Topeka. Markets will hugely affect your potential earnings across time. Calculate the capitalization rate, or the expected annual rental income divided by the purchase price. Locations with higher “cap rates” usually fetch higher returns, but also ramp up risk as well. Figure out how location, volume, and competition interact before jumping into any particular market, or you may end up underwhelmed by the returns on your hard work.

Finding and Working with Tenants

Being a landlord includes many facets, but it’s primarily a people-focused business. Are you equipped to respond if a tenant starts refusing to pay rent? Do you enjoy building positive relationships with people face to face or remotely, or would you find it draining? Can you deal with pest problems, appliance repairs, and noise complaints in an efficient manner? If a tenant violates the terms of their lease, do you know how to act? When you’re a landlord, no two days are the same. Whom you rent to and how you structure your workflow will make or break how you negotiate the unique demands of this job.

Renting to the right people will cut down on potential chaos and conflict, so screening possible tenants is an absolute must. Trulia recommends performing background and credit checks, as well as meeting for an in-person interview and collecting references from employers or previous landlords.

Invest Your Time and Energy

Successful landlords don’t just invest a chunk of money into their properties; they pour in time and energy, possibly at the expense of other aspects of their lives. As one New York-based landlord told CBS, “People need to understand that this is a business, not a hobby. You need to take it seriously. The people who make it a hobby usually run into problems because it’s not their top priority.”

Landlords don’t need to handle everything on their own. Many choose to work with property management to streamline all the little things that contribute to landlord stress and over-commitment, like finding tenants, handling paperwork, addressing maintenance requests, and more.

Know Local, State, and Federal Laws

Regulations at every level dictate what landlords can and can’t do, and violations can land you in serious hot water. Read up on laws and regulations in your area, and get a reputable attorney involved before drafting up any legal paperwork. According to Zillow, you’ll need a “clear understanding of your landlord rights and responsibilities, tenant rights, and the basic workings of specific notices and eviction procedures.”

Becoming a landlord is a great way to bring in income while maintaining flexibility and independence, but it’s important to do your homework beforehand to get a feel for the challenges as well as the potential payoffs.

Make Your Sydney Home Ownership Happen. Here’s How:

February 16, 2017 by Ashley Leave a Comment

If you’re now [finally] sure that you want to get serious with your quest for the Australian dream, then understand that you’re taking a plunge into the complicated world of home ownership. Saving for a house deposit can be a tiring and lengthy ordeal, but it’s certainly doable, as thousands of other homeowners will tell you.

In this article, we’ll share some tips on how to get you started with your Sydney home ownership dream.

Smart budgeting that works. Start by cutting out on things that you don’t need. A wise saying goes “if you can live without it, you don’t need it.” And you don’t need to starve yourself to death just to save for that down payment. Find that balance in everything you spend on and you should be able to save. Emotion plays a big role in saving money, and if you became miserable while in the process, you might splurge without control.

Get a cut from your salary. I think this lesson was derived from the bible where people should reserve the first fruits of their crops for the Lord. In the present day, this applies to us in terms of a salary cut. Offer up the first part of your income before you start spending. This doesn’t need to be spiritual. Just apply the principle to save for your home deposit. Never spend first then save the ones left.

Sell some stuff. Admit it, you have tons of stuff that are gathering dust. How much of it do you really need? Do you really need that second TV or that old laptop you’ve replaced already? One man’s junk, in this case, is another man’s treasure – and treasure sold is money saved for your home deposit. In any case, you can always upgrade again in your new home.

Maximize thrift shopping. This extends to grocery shopping. And you don’t have to live off less to be able to save money since you can buy more with less. Shops like Cosco, Aldi, and others are good examples of making your money go further. Buy more with the same amount of money by shopping at discount stores and purchase things when they’re on special.

Work on a second job. Creating a second income is easier if you have extra skills. This includes baking, cooking, handicraft, social media management or writing. You can sell your pastries or food, same goes with handicrafts. You can apply as a virtual assistant online or write blogs. Doing freelance on the side gives a welcome source of income and eventual savings.

Find a good property on an equally good community. Committing to a house is indeed a big deal, which is why you need to be extra careful when looking for the right property. Think cost of living, property value, neighbourhood status (crime, density, facilities, schools, etc.) The cost of living in a Sydney based House & Land package from Lendlease for instance is worth it since the properties itself has great return potential according to recent data. Big thanks to the expanding community and continuous development in the Sydney suburb.

End Note

As you can see, saving for a house is a huge undertaking. It can be very time-consuming with a lot of sacrifices involved. Take the tips that apply to you and those that do not. Whatever you experience while in the process, remember that sticking to your homeownership goal is the only way you’ll get the keys to your very own home. Best of luck!

How to Invest in Real Estate Without Getting Your Hands Dirty

December 16, 2016 by Ashley 1 Comment

Investing in real estate does not automatically mean you have to buy a fixer-upper to work on yourself and then flip for a profit. If you want to get into real estate but don’t have those kinds of skills, there are other ways you can accomplish it, like owning rental property.

But even owning and operating a rental home can be a lot of work. If you don’t hire someone to help you with management, you’ll be responsible for finding and vetting tenants, collecting the monthly rent, performing repairs and upgrades, and more.

These traditional types of real estate investing are a lot hands-on work, but alternatives have become more popular in the last few years, allowing people to get in on the good of real estate investing without all the work. Here are a few ways you can invest in real estate without getting your hands dirty yourself.

Crowdfunding

If you’ve been dreaming about investing in real estate without getting your hands dirty, you may need to look into options you hadn’t thought about before. Crowdfunding is a relatively new concept that could help to turn your dream of investing in real estate into a reality. By crowdfunding you combine the money you have available with that of other people who also want to invest in real estate so that together, everyone gets a share of the profits. This is done through a Real Estate Investment Trust, or REIT.

Modeled like mutual funds, REIT’s allow investors to have a steady stream of income and diversify their investments. REIT’s have experts making up a management team that devises a plan for investing the pooled money in ways not usually available to the average real estate investor. They will charge fees for this service, but dividends are paid out to shareholders regularly. Several different companies now offer these types of crowdfunded real estate investment options. Usually the investments are spread over more than one property which can make growth of your investment more likely and at the same time, reduce the possibility of losses. Some of these companies allow you to withdraw money a couple of times per year and minimum investments can be very reasonable.

Owning Rentals

Buying a single family home to rent out is another way you can invest in real estate. But as I said before, it can be a lot of work. This is where companies that offer turnkey rentals come in. A few companies have cropped up in the past few years to help you find turnkey rental properties to fit your investing goals. They can also provide help with property management in most cases, so you don’t have to do all the work yourself. without getting your hands dirty yourself.

Another option you can choose if you want to get started in rentals is to go through FHA for a first time buyer loan. There are specific rules that apply, such as living in the home for a minimum of a year, but you may be able to qualify for a loan with only a 3.5% down-payment. Most banks require 20%, so this is a huge advantage if you don’t have a lot of money to get started with. After living in the home for a year, turn it into a rental. If you don’t want to do the managing or maintenance work, hire a company to do it for you.

It is possible to invest in real estate without getting your hands dirty or taking a lot of work yourself. Just make sure your do your research to find out what will work best for your investment goals.

Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.

5 Benefits of Investing in Real Estate Through Private Lending

May 8, 2015 by Average Joe 11 Comments

Real estate investing is a key ingredient for creating a long-term investment plan that will maximize your wealth and can even lessen your risk. But it seems like there are limited options available to you, considering most investors don’t have the necessary time or experience to do it successfully. You can:

Purchase your home. Although this is considered more consumption than investment, this is still an investment in real estate with potential appreciation.

Purchase rental property. Most people have heard about the ups and downs of owning rental properties, but collecting monthly rent from tenants is great way to generate income. The downside is the need to manage the property yourself or hire a property manager to directly handle tenant and property issues.

Purchase REITs. Similar to purchasing stocks, a real estate investment trust is a corporation that raises money by trading on major exchanges, and it pays investors 90 percent of its taxable profits via dividends.

Buying real estate doesn’t necessarily mean dropping a ton of cash into the ground.

Besides these options, there’s another that the majority of real estate investors are unaware of: investing in real estate through private lending. As a private lender, you essentially become the bank. You lend your money to other investors (borrowers) and charge an appropriate interest rate for the use of your money. Here are some of the benefits of real estate private lending:

1) Monthly cash flow: The borrower pays you interest every month, which is typically between 8 and 15 percent.

2) Security: Your investment is secured by a lien on a tangible piece of real estate. That gives you collateral when lending your money, aside from just the soundness of the borrower. Typically, you shouldn’t loan more than 75 percent of the property’s current market value, giving you some cushion in the event that the property’s value decreases.

3) Diversification: Real estate private lending gives you the ability to diversify your portfolio — and not only from a real estate perspective. If you want to create current income, it’s another fixed-income option.

4) Lower volatility: You can better manage the market risk if you keep your real estate loans short term.

5) Passive investment: Instead of learning the nuances of real estate development, construction, management, etc., you can lend to other experienced real estate investors who do all the work. You just act as the bank and receive interest payments, and your money is returned at the end of the investment.

Being a real estate private lender is a great way to get exposure to real estate without doing all the work. But you still have to understand some of the risks involved. The market value can cause properties to quickly increase or decrease in value due to local and national factors.

Borrower credit can also be volatile; you need to make sure the borrower is in stable financial condition and can pay back the loan. Also, verify that the borrower’s investment strategy is solid.

Finally, make sure you have good legal representation to draft loan documents, coordinate the transaction, ensure your loan is properly recorded, and see that agreements are in place to protect you as the lender.

Real estate private lending is a great way to get exposure to real estate and generate passive income for your investment portfolio. As with any investment, you need to understand the risks involved and do your homework before jumping in headfirst. But if done right, real estate private lending can generate some of the best risk-adjusted returns in the marketplace.

Jeff Carter is the managing director and founder of Grand Coast Capital Group, where he oversees all aspects of the business. Grand Coast Capital Group is a national private lending firm based in Boston that provides creative short-term financing to real estate investors, builders, and developers across the country.

6 Tips for Paying off Your Mortgage Quickly (Without Going Broke)

September 29, 2014 by Average Joe 5 Comments

Wouldn’t it be nice to stroll around your living room before work with a donut in one hand and a cup of coffee in the other feeling

like the king (or queen) of your castle?

The house is yours. Hooray! After years of apartment serfdom, you finally own the place.

Well…sort of.

There’s that mortgage again, nagging at you. Of course, you should never rush into a big financial decision, and having a mortgage can be a really sensible way of staking your claim on the property ladder. But there’s no better way to feel like you own the place than, well, owning the place.

Paying your mortgage off early can free up your money, allow you to make investments elsewhere, and make your retirement years more comfortable. Here are some manageable ways to stop that mortgage from dragging you down:

1. Pay one extra payment a year.

It sounds like a simple solution, but you’ll be surprised how much extra you can save when you push yourself. By buying one less cup of coffee per week or watching a movie at home instead of going to the movie theater, you can make small daily savings that add up to a hefty sum at the end of the year. This mortgage calculator from Bankrate shows you how repaying a little more here and there can reduce your mortgage in the long run.

2. Plan a staycation.

I’m a firm believer in rest and recuperation, but vacation packages, hotels, and airfare can be really expensive, so why not save some money by vacationing closer to home?

A family road trip or a camping expedition can be an adventure, and there are so many beautiful national parks and sights in the U.S. that you’ll always have somewhere new to try. By trading your trip abroad for a staycation even just once every three years, you could save enough to manage some extra payments and be mortgage-free sooner than you think.

3. Refinance for a shorter-term mortgage.

Refinancing your home from a 30-year to a 15-year mortgage can make the light at the end of the tunnel much brighter and reduce the amount of interest you pay overall. You’ll need to budget carefully to make sure you can afford the higher monthly payments, but if your income allows, it can be a smart financial move.

4. Use your tax refund.

Making sense of your tax return can be nightmarish, but that magical refund is the reward. Putting that amount toward paying off your mortgage every year could dramatically reduce what you owe and ease the financial burden. Plus, your mortgage may be part of the reason you’re getting a refund in the first place, so keeping that money in the mortgage fund is a nice, neat way to control the flow of your finances.

5. Apply your bonus.

Did you just get a bonus at work for a job well done? Instead of going shoe shopping or buying a fancy lawn mower, why not put that extra money toward your mortgage? The only thing more rewarding than cash is that feeling of pride you’ll get from owning your home outright.

6. Get a roommate.

If you’ve got some extra space and wouldn’t mind sharing your home with another person, getting a roommate is a creative way to help you pay off your mortgage faster. If a permanent roomie doesn’t sound appealing, use sites like Airbnb to fill your extra room for just a couple nights a month to generate some extra money without making a huge commitment.

Don’t let your mortgage get you down. Even though it can seem like it’s always there, judging you, there are ways to help you be mortgage-free sooner rather than later.

Elizabeth Dodson is the co-founder of HomeZada, a cloud-based home improvement and organizational software tool. HomeZada strives to educate and provide resources for homeowners in all areas of home management, including home improvement projects, maintenance, inventory, property information, and property value.

Photo: TaxCredits