But when you’re face-to-face with an appliance salesperson, sometimes their pitch can be pretty convincing. Maybe you’re the “better safe than sorry” type, you simply don’t want to risk a hefty repair bill later on, or happen to be a firm believer in them. So, you go for it and find yourself with a warranty that may—or may not—come in handy if something breaks.

The good news is, even if your appliance runs perfectly and never needs repairs, that doesn’t mean it was money entirely down the drain! In fact, many warranties offer financial benefits even when nothing goes wrong. So don’t just shove the paperwork in a drawer and forget about it— make sure to read the fine print and capitalize on any perks they might have used to sell you on buying it in the first place!

Here are three ways you might be able to get some value out of an appliance warranty—even if the product doesn’t break:

1) Reimbursement for Upkeep

Some warranties cover part of the cost for items that help keep your appliance in tip-top shape, like hoses, filters, or even cleaning supplies. While it may not get you these items for free, you can often get a percentage reimbursed with proof of purchase. Be sure to check the annual reimbursement limit for your plan—it could save you a decent amount over time.

2) Money Back If You Never File a Claim

Believe it or not, some warranty programs reward you for not needing repairs. If you go the full term of the warranty without filing a claim, you might be eligible to get a percentage of the warranty cost refunded. Just don’t expect them to remind you of this or just send you a refund! You’ll have to keep your eye on the expiration date and reach out to the company in order to get some money back.

3) Added Value If You Sell It (Or Include It in the Sale of Your Home)

Some warranties transfer to a new owner. If you sell your appliance—or include it in the sale of your home—a transferable warranty can be a big selling point. Buyers love the added assurance that their new purchase is covered, and it can even boost buyer confidence in your overall deal. It may be difficult to quantify how much value you get out of this, but it can certainly help justify the money you spent on it!

The post 3 Potential Ways to Cash In on Your Home Appliance Warranty… Even if Nothing Breaks appeared first on Lighter Side of Real Estate.

The good news is, according to a recent study, 85% of parents are thrilled to have them back! But that doesn’t mean it’s all sunshine and rainbows…

• 34% of the parents surveyed said it led to major financial strain
• 27% weren’t financially prepared for their children to stay long-term
• 19% said it affected their finances and retirement plans
• 29% of them said that their children rarely or never contribute financially

So, if you’re one of the many families who find themselves in this position, here are 5 tips to not only help you survive the arrangement, but also put your adult kids on track to thrive on their own:

1) Make Them Contribute Financially

While it might feel awkward at first, setting up a financial contribution from your adult kids is key to keeping the household budget balanced. It’s not just about helping with bills; it’s a step toward teaching them real-world financial responsibility. Start with an amount that makes sense, and as they settle in, gradually increase it to mimic the growth of their future expenses.

2) Make Them Save Money

Helping your kids establish a savings plan is crucial for their long-term independence. In addition to contributing toward household expenses, have them set aside a portion of their income each month to build a financial cushion for when they eventually move out again. It’s all about creating a pathway to their financial freedom, so they don’t end up back in your guest room five years from now.

3) Make Them Do Chores

Whether it’s taking out the trash, mowing the lawn, cooking, or doing the grocery shopping, have them pitch in to keep the household running smoothly. Establishing a chore routine not only lightens your load but also instills a sense of responsibility, and prepares them for living on their own.

4) Establish Some Privacy for Everyone…

Not only do kids learn to love their freedom when they move out for a while, parents do too. Living together again doesn’t mean you have to give up your personal space. Setting clear boundaries around privacy — whether it’s specific rooms, times of day, or activities — helps maintain harmony. After all, everyone needs their own corner of the world, even in a shared home.

5) …but Also Enjoy the Time You Have Together!

Don’t get too caught up in rules and boundary-setting, and forget to enjoy this unexpected time together! Whether it’s family dinners, movie nights, or just catching up after a long day, these moments are precious. Embrace the chance to reconnect and create new memories, because before you know it, the nest might be empty again.

The post 5 Tips for Surviving When Adult Kids Move Back Home appeared first on Lighter Side of Real Estate.

Unfortunately, many of the things you’ve heard probably aren’t completely (or even remotely) true, because they’re coming from people outside the industry, who don’t truly understand it themselves.

Here’s a breakdown of 9 misconceptions about the real estate settlement, to help you separate fact from fiction:

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The post Clearing up 9 Misconceptions about the Recent Real Estate Settlement appeared first on Lighter Side of Real Estate.

As much as you don’t want to deal with them, chances are you will, no matter how much you tell them to stop calling you. And when you do, there’s a good chance you’ll ask them to do one of five common things that they’re probably going to be either unwilling (or unable) to do.

Let’s take a look at what they are, and why you shouldn’t expect them to, just to make sure you have reasonable expectations…

1) If you’re an agent, don’t bother calling…

No matter how nicely, or how aggressively you ask agents not to bother calling you when you’re trying to sell your house on your own, you’re still going to get calls, knocks on your door, or mailers from agents!

They get that you want to sell your house without an agent, but there’s also a good chance they may have a buyer that’s perfect for you house, so of course they’re going to reach out to see if your house is a good fit for any of them.

2) Send me any buyers you have that would like my house…

For the time being, you’re in the same business as real estate agents. A large part of the job is finding buyers, and finding them isn’t as easy as it may look, as you’ll probably find out.

So when you ask an agent to send you any buyer clients they know who would like your house, you’re basically asking them to just send you a walking, talking paycheck they’ve been working hard to earn over the course of many weeks and months of education, advice, and showings.

That said, if one of their buyers would like your house, they may want to bring them to see it… as long as you’re willing to cooperate with them and allow them to remain involved in the purchase!

3) If you have buyers that want to buy my house, they need to pay your commission…

Once it becomes apparent you may need to agree to working with buyers who have an agent, the next thing you might feel inclined to tell an agent is that you’ll only work with them if the buyer pays their commission.

Most buyers don’t have the money to pay their agent separately from the transaction, which is why it is most often paid out of the proceeds of the sale. So, if you want to work with a buyer who’s represented by an agent, be prepared to offer them a commission, and agree upon how much that will be before they show your house to their buyer.

4) Can you send me the contracts and forms you use so I can use them?

In addition to the actual contract for the purchase of your home, there are also a lot of other forms and disclosures that need to be filled out as part of the process. This catches a lot of homeowners by surprise when they try to sell their own house. It’s not always easy to figure out exactly what forms and disclosures you need, because they vary from one area to another, and are often not that easy to find copies of that you can use. So, many FSBO’s find themselves asking agents if they can give them blank or editable versions of all the paperwork they’ll need.

The problem is, you’re asking them for proprietary legal documents. Their docs are probably specifically written for their use, and include their company and personal info. And they (or their company) paid for the creation and use of those documents. It could also open them up to potential legal issues. So don’t be surprised if agents won’t just send you copies of their forms, disclosures, and contracts.

5) Can you list my house on the MLS for a small fee?

There are some real estate agents and companies that list houses on the Multiple Listing Service (MLS) for a fee. But you can’t ask and expect every agent to be willing to do this.

The majority of agents list properties on the MLS as part of their entire package of service to a seller client, not as an a la carte option. This is another area where liability and insurance issues, as well as their broker’s rules, would prevent many agents from doing it, even if they wanted to.

The post 5 Things You Shouldn’t Expect Agents to Do If You Sell Your House “For Sale by Owner” appeared first on Lighter Side of Real Estate.

So, of course it happens in real estate. An agent is sometimes better off letting their client do something they wouldn’t recommend, rather than trying to prove their client is wrong in order to maintain a good relationship. But it’d be a whole lot better if you didn’t do certain things when you’re buying or selling real estate, because they can actually hurt you and make you wish you’d listened to your agent’s advice!

Here are 6 things you might feel you’re right about thinking or doing, but shouldn’t insist on being right because they could end up causing you major issues:

1) Not getting pre-approved until you find a house you like

Technically you’re right if you think you don’t have to get pre-approved before looking for a house to buy; there’s no rule or law saying you need to. But doing so isn’t the wisest choice. Getting pre-approved for a mortgage before you start looking helps you to avoid wasting time looking at houses you can’t afford, and the heartbreak of finding one you do love, only to find out you can’t afford it.

So, while you can find agents who won’t insist that you get pre-approved before they take you out to look at houses, the ones who do insist are just looking out for your best interests.

2) Deciding on a listing price

You have the right to list your house for any amount you want, but listing it for too high of a price is one of the biggest (and most common) mistakes many sellers make. It might seem like your agent is trying to convince you to accept a lower price than you think your house is worth — just to make a quick sale, or make their job easier — but most agents take a lot of care in coming up with their pricing recommendations.

Even if an agent is willing to list your house at whatever price you want, there’s a good chance you’ll eventually see that the price they originally recommended was about where it ended up selling. Listing at a higher price tends to cost you more time on the market, and often houses sell for less than they would’ve if they were priced appropriately to begin with.

3) Waiting to make an offer on a house

Some buyers see a house they love but want to wait to make an offer on it until they see every single home on the market, or wait to see if something better is listed in the future.

While you shouldn’t rush such a big financial decision, if your agent seems to be pushing you to make an offer rather than wait, it’s probably because they know there’s a good chance the house will be sold by the time you decide to make an offer and that you’ll regret it. Don’t let it slip through your hands; it’s the adult equivalent to losing a balloon when you’re a kid after being told to make sure you hold onto the string tightly.

4) Passing on a great offer from a buyer, hoping for a better one

You don’t have to accept an offer from a buyer if they offer less than you’re asking, but you’re probably better off negotiating them up as much as possible and accepting their offer, rather than waiting for another buyer to come around in the future.

There are certainly exceptions to the rule, but more often than not the first offer you receive is the best you’re going to get. That’s because it’s usually being made by the most serious buyers in the market, and the longer your house is on the market, the more buyers see it as negotiable and they often offer less than the first buyer. Agents know this from experience seeing enough sellers regret not taking the first offer, so trust them when they advise you to do this, rather than hope a better offer will come along.

5) Waiting for the market to crash to buy a house

Real estate values aren’t constantly climbing; the market has ups and downs. So it’s only human to want to avoid buying at the peak, and to buy at the bottom of the market. But being right about when (and even if) the market will crash is almost impossible. Economists can’t accurately predict if, when, or how much the market will crash, so it’s pretty much impossible for a homebuyer (or your agent) to figure it out. Yet, plenty of would-be buyers think they can somehow do it.

Buy a house when you need or want to, at a price you feel comfortable with and can handle financially. While you may not buy at the absolute bottom, it’s still most likely a lot lower than it’ll be in the future. Over the long haul your house will appreciate and you will gain equity no matter when you buy.

6) Waiting to sell when the market peaks

As mentioned in #5, predicting the market is almost impossible for buyers, and the same (but opposite) rationale applies to sellers. The chances of waiting to sell your house until the market has peaked is an almost impossible task.

If you want or need to sell and the market is strong, by all means do it! You never know when something in the market will change and prices start to come down. It may be aggravating to sell your house and then feel like you would’ve made more money if you’d waited a while, but that’s nowhere near as aggravating as waiting and selling for less than you could have if you hadn’t tried to time the peak.

The post “The Customer Is Always Right…” (Except When Doing These 6 Things When Buying or Selling a House) appeared first on Lighter Side of Real Estate.

Rents and house prices aren’t cheap. Then of course there’s the price of food and utilities every month. And if they went to college, they probably have loans they need to pay off… which is why so many young adults live at home for a lot longer than people used to.

But at some point, they have to move out and get a place of their own. And doing that is difficult if they haven’t been put in a position to prove they can handle paying for a place of their own! Whether they’re dealing with a landlord, or a mortgage lender, they’ll need to be able to show some proof that they’re financially responsible.

So here are a few things you should encourage your kids to do as early in life as possible (within reason!), so they can get a place of their own when the time comes:

1) Earn money they can prove

Odd jobs like babysitting, or doing yard work for neighbors might put some money in their pocket, but it’s also easy to not claim on a tax return. Getting jobs that put them on the payroll and give them an actual paycheck will make it easier for them to prove their income to creditors, mortgage lenders, and landlords. If they get a job that also provides tip money, they should avoid the temptation to fudge the numbers on their tax returns; it might save them a few bucks in taxes, but it will also make it look like they earn less than they actually do, which could affect how a lender or landlord assesses them.

2) Establish credit history

Bad credit isn’t good, but having no credit history isn’t much better. It takes time and a few creditors for a credit report to show that a young person has been given credit in the past. If a lender or landlord sees that they have no previous credit, they’re not likely to want to be the first to take the risk with them.

Have your child open some credit cards in their own name, buy a car, and rack up some monthly recurring bills (like a cell phone in their name) that get reported to credit agencies.

3) Be responsible with their credit

Once they have credit cards, they should use them regularly without maxing them out, and make timely payments each month. When they buy a car, they need to make sure to not miss a payment, and certainly not let it get repossessed. Not only is this good for building their credit history and score, but it also teaches them to handle the responsibility of having bills to pay, and staying within their budget each month.

Doing these 3 things will go a long way in making it easier for them to move out on their own when the time comes. (But don’t be surprised if they ask for a little help with the downpayment on their first house!)

The post 3 Things Parents Should Encourage Their Teens & Twenty-Somethings to Do (If You Ever Want Them to Move Out of Your House) appeared first on Lighter Side of Real Estate.

Nobody can (or should) force you to buy a home, but it can’t hurt to at least take a look at the flip side of the coin when it comes to the most common reason you may have for not buying one.

So take a look at the top 6 reasons renters give for not buying a house and consider if it’s something you truly believe, or if buying might just make sense for you when you really think about it:

1) “I don’t want to pay for or do repairs…”

Let’s be clear, most people don’t want to pay for or do repairs! And yes, if you own your own home, you’re definitely responsible for anything that needs to get fixed. But you’re not entirely off the hook as a renter a lot of times either! Depending upon your landlord and the terms in your lease, you may be responsible for the cost of some repairs up to a certain dollar amount or type of repair. You may even be responsible for some maintenance and upkeep.

So if this is your reason, make sure you only agree to sign a lease that puts all of the responsibility and cost of repairs and maintenance on the landlord. That said, getting your landlord to take care of a problem can be tough. Some landlords hate paying for repairs and avoid it as much as possible. At least when you buy your own place you have control over what gets done, when it gets done, and can even choose to do things that make the place better and more enjoyable for you.

2) “It’s cheaper to rent…”

You’d think renting has to be cheaper than buying a home, but it’s not necessarily the case. It can be, but buying a home can also be cheaper than renting. It depends on rents in your area and what you could buy in your area. Don’t just assume that you couldn’t possibly buy a place of your own for less than what it would cost you to rent. Look into whether or not it’s true, especially with rents increasing so much and so quickly in the recent past.

3) “House prices are too high right now…”

Real estate prices almost always feel high and as if they couldn’t possibly go any higher. People in the 1970’s could never have dreamed their house would be worth what it is today, and likely felt prices were too high back then. Same with people in the 1980’s, 1990’s, early 2000’s, etc. Eventually, the value of whatever you buy will be higher than it was when you bought it, even if you bought it at a peak. Sure, you could wait for a dip in the market and try to buy then, but that usually means there are other economic issues at stake that may make it impossible for you to buy, or the cost will be higher in other ways, like interest rates.

4) “House values could go down and I’d lose money…”

If only you could look into a crystal ball and see the future, it’d be a lot easier to feel OK about buying a house. Well, that depends upon when in the future you looked of course! Because if you looked into the future you’d most likely see that it’s true that the home you bought is worth more money, unless you happened to look at a brief period of time that values happened to go down. It’s true; they do. But the secret is to just not sell when they’re down if you don’t have to. Just hold on for a while and the values will not only bounce back, but they’ll exceed where they were before they took a dip.

On another note, think about how often do rents go down?! If the housing market takes a dip, do you think your rent will go down in the future?

5) “I need a bigger down payment…”

You do need some money for a down payment and to cover closing costs, but it may not be as much as you think. It certainly doesn’t have to be 20% of the value of the home you want to buy. It could be as low as 3% to 5% depending on the type of loan you apply for. A bigger down payment may be helpful in getting you a better rate or lowering your payments. But that takes time, and home prices or mortgage rates could go up while you’re saving, putting you as far out of reach as you were when you started.

6) “I want the freedom to move…”

If you know you’re going to move in the near future, or like to move frequently, then buying probably isn’t the best idea for you. But if you just don’t like the feeling of being tied down, you may want to think about buying rather than renting. After all, renting a place ties you down as well. You still have to sign a lease, and you may not even be allowed to break it, or may have to pay a penalty or the remainder of the lease amount if you do move. If you own your own home, you can decide to sell it (or become a landlord and rent it out) whenever you want.

Hopefully this gives you some food for thought. Whether you decide to rent or own a place of your own, you’re doing it having considered both sides of the coin!

The post Top 6 Reasons Renters Have for Not Buying a Home (And Why They May Be Wrong) appeared first on Lighter Side of Real Estate.

Garage sales seem like a great way to declutter your home, and pocket a little cash at the same time. But if you haven’t hosted one before, it can be an eye-opening experience.
Before you begin lugging everything from your antique china to your Blac Chyna-inspired sunglasses outdoors and setting up shop, you should accept these universal truths that you’re likely to face on the day of the sale.

1. Early birds get the worm … and on your nerves.

Those aren’t raccoons in your garbage cans, they’re bargain hunters! Though you advertised your start time as 8 a.m., expect to find strangers milling through your yard, driveway, and she-shed before sunrise.

2. Be ready to negotiate like a ‘Shark Tank’ titan.

Even if you’ve priced something at a nickel, there’ll be a customer who’s ready to haggle it down to two cents. You’ll need plenty of change (and patience) to get through the day.

3. They’ll try and buy things you don’t even want to sell!

Customers will make offers on items you’re not selling, as in “How much do you want for your mailbox?” and “I’ll give you $2,000 for that mini van!” Even the half-eaten bowl of cereal your spouse is downing on the back deck is fair game in the eyes of these overzealous shoppers.

4. You may be more emotionally invested than you realized.

By midday, you may experience irrational connections to certain items and slip into a serious seller’s-remorse funk. Don’t be surprised if you want to chase down the buyer who’s driving away with the chicken costume your daughter wore for her first Halloween. The same holds true for that Cure album you just sold for $1. Wasn’t it playing in the background when your longtime crush invited you to the prom? “What have I done?” you sob while resting your head on a pile of kids’ sweatpants no one wants to purchase.

5. Things look different in daylight.

Though your goods might have appeared picture perfect in your basement, natural light can be one ugly truth-teller. Is that chocolate frosting smeared up and down the sleeve of your cream-colored ski jacket or something more concerning? You’ll wish you’d put a little more elbow grease into cleaning out that high chair when you catch a family of squirrels foraging inside it.

6. Trouble can start anywhere.

You anticipated there might be some fighting over those unopened hazelnut Keurig pods you bought by accident and were too tired to return, but problems begin brewing in the least likely places. Expect drama when your mom stops by to “help” and wants to know why you’re selling the monogrammed leg warmers she gave you in 1982. “But you told me you loved those?’ she’ll say, her voice cracking. “I don’t understand. What other things are you lying to me about?”

7. You’ll think you know what people want. (You don’t.)

You may think that nobody would pay cold hard cash for your daughter’s Rainbow Loom bracelet collection, or that 2009 hardcover edition of the Guinness Book of World Records which outweighs the child who bought it at the garage sale your neighbor hosted last spring. But, you’d be surprised at what people will buy! When in doubt, put it out…

8. Get comfy with “no.”

Strangers will ask :

• if they can use your bathroom,
• if you’ll arrange and pay for the delivery of your hot tub and swing set (also not for sale),
• if you still have the manual and warranty information for the decade-old Crock-Pot you’ve priced at $3,
• if they can put a hold on some bags of Legos until they can bring their kids, spouse, and in-laws back to check them out later

(Pro tip: Your answer to any and all these is a firm “No.”)

9. Brace for self-doubt.

Prepare to second-guess yourself because at some point in the afternoon, you’ll look around at all your unsold items and wonder why you didn’t just rent a dumpster and save yourself the trouble, because you really don’t want to drag all these items back indoors. What’s better…$10 for that old bunk bed, or having to get rid of it yourself at the end of the day?

10. Show me the money! (What money?)

At the end of the day, don’t be surprised if, after tallying up your sales, you realize your kids made more money at their lemonade stand.

The post 10 Garage Sale Truths That’ll Make You Question Ever Having One appeared first on Lighter Side of Real Estate.

If you’re considering moving into a smaller home, you may be eager to save money on mortgage payments and utilities. You might also be looking forward to spending less time and effort on interior and exterior home maintenance.

But before you begin packing up your belongings, here are a few things you might want to consider to help you choose the best one for the lifestyle you want.

1. Will this be your forever home?

Just because you’re downsizing, that does not mean you will only be considering a one-floor home. You could be looking at smaller homes with second floors, or lots of stairs.

You may still be in great health and shape, but as you age, steps often become the enemy, as climbing and descending a staircase causes pain in the back and legs. With that in mind, be realistic about the type of floor plan that best suits your future needs.

If you’re thinking this move will be your last and you’ll enjoy your retirement in this smaller space, you may want to look for a ranch, condo, or apartment that offers one-level living.

2. How much room will you need?

If you have children, even if they are in or out of college, that doesn’t mean they won’t be back to live with you at some point. Multi-generational living is on the rise. According to the Office of National Statistics, 32 percent of those in the 18 to 34 age range lived with their parents in 2017, compared with 25 percent in 1997. For men, that statistic is even higher at 37 percent. Though you may think your adult children have left the nest, they may boomerang their way back to you.

If you move to a popular destination, will you have frequent visitors? If so, do you want to open your home to them for a brief or extended stay?

These are just a couple of specific scenarios to get you thinking about the square footage you may need. If having room to accommodate adult children, grandkids, relatives, or friends is important to you, you may not want to scale back too substantially.

Of course, if you’re hoping to keep your home all to yourself, a significant downsizing should do the trick!

3. What are your storage options?

Keep in mind, if you’re downsizing, you will likely have to part with some belongings, so take an honest assessment of what you have and what of it you want to keep and bring with you.

Do you have heirloom furniture you’re not ready to part with, or large sporting equipment like jet skis or kayaks? If so, you’ll want to be sure that your next home offers a place for you to store these treasures. If it doesn’t, look into nearby storage facilities so you don’t have part with your prized possessions.

4. Will your pets be welcome?

Even if your goal is to go smaller, you’ll still want enough space to ensure your pets feel comfortable and safe.

If you have a cat or dog (or any other type of pet), you probably think of them as a four-legged family member. As you’re considering smaller spaces such as condos or apartments, make sure they’re pet-friendly. And, if your pet needs time in the great outdoors, make sure it’s allowed and that there is ample and desirable space to bring them outside.

5. Is there a sense of community?

Moving can be stressful — especially if you’re leaving behind friends, family, and neighbors you’ve known for years. Before putting down roots in a new locale, think about what your day-to-day life will be like without this close circle.

If you’re accustomed to an active social life, you’ll want to be sure your new enclave is brimming with opportunities to make new friends. Likewise, if you enjoy hobbies you’d prefer not to live without, do your due diligence so you can still enjoy the activities that bring you fulfillment.

6. What are your transportation options?

If part of your downsizing plan includes hanging up your car keys, you’ll want to explore your transportation options. From ride-sharing and community shuttles, to mass transit and air travel, know how easy or challenging it is to get around your potential new area before you move.

Taking the time to truly think about your preferences and what will make you most comfortable going forward can save you from the heartaches and headaches of having to move again.

Once you’ve made a list of must-haves, share them with your real estate agent so you’ll look at only those spaces that meet your criteria. This way your only regret will be that you didn’t downsize sooner.

The post 6 Questions to Consider When Downsizing appeared first on Lighter Side of Real Estate.

Your home is probably your largest asset and one of the biggest investments you’ll ever make. If you’re the parent of a student who’ll be heading off to college in the near future, you may be wondering about how to use your home to invest in your child’s future by helping pay that sky-high tuition.

Here are three ways you may want to consider using the equity in your home to do so.

1. Home Equity Loans

There are multiple ways to borrow against your home’s equity. The first is a straightforward home equity loan, which is a second mortgage on your home. You’ll receive the full amount of the loan upfront and then begin paying it back over time with interest.

As you’ve been paying your mortgage, you’ve been building up equity. For example, if your mortgage was originally $300,000 but is now down to $200,000, your home equity equals $100,000, which you might be able to borrow against in the form of a loan.

Depending on the lender, you might be able to borrow as much as 80 to 90 percent of your equity, which means in the case of our example, you’d have possibly $80,000 to $90,000 at your disposal.

2. Home equity line of credit

Another option is a home equity line of credit (HELOC). Much like a credit card, you have a maximum amount you can borrow up to as needed.

Whatever amount you choose to borrow, that’s the figure you’ll pay interest on. So, if your line of credit extends up to $90,000, but choose to only borrow $20,000, you’ll only pay interest on that amount, until you pay it down.

3. Cash-out refinance

Another way to use your home to get your hands on much-needed funds is to refinance your current mortgage loan, replacing it with a larger mortgage loan. You can take the difference between the two loan amounts and spend it as you wish. This is called a cash-out refinance.

Again, you will likely only be able to take out a loan for 80 to 90 percent of the value of your home, so the difference you can keep will be based upon that. So, let’s say you have a home worth $300,000, and you only owe $100,000 on your current mortgage, you might be able to get a new mortgage against your house for somewhere between $240,000 to $270,000. After you pay off the original mortgage, you’d have $140,000 to $170,000 to work with.

This can be an especially good option if your current mortgage is at a higher interest rate than the current rates being offered.

Of course, your home is not the only source of money to pay for college tuition, but it does offer you some alternatives. Perhaps one of these three is a perfect fit for you. With that said, everyone’s situation and finances are different. So, before using your home equity make sure you consider all of the options available to you and your child.

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