September 17, 2021

MP Now News

Mortgage News

Took on Too Much House? 3 Options to Look At

If your home is too big or too expensive for you, here are some steps you can take.

You will hear that often too much house is a mistake you will regret in the end. When you buy a home, you can’t just get a big one mortgage You struggle to afford it, but it could leave you with additional costs like high property taxes, tons of maintenance, and expensive utility bills. If you’ve taken on too much home, here are some options worth considering.

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1. Refinance your mortgage

If you’re having trouble keeping up with your mortgage payments, Refinancing could help shrink it. When refinancing, you swap your existing mortgage for a new one with more favorable terms. That could mean converting a 15 year loan to a 30 year loan with lower monthly payments. Or it could mean keeping the repayment term the same but lowering the interest rate on your mortgage so your payments decrease. There are several different ways that you can play around with, and Refinancing rates are currently competitive across the board, so it’s an option worth exploring if your current mortgage is seriously breaking your budget.

2. Get a tenant

If you’ve bought a bigger house, you may have the option to rent out part of it. This rental income could help offset your expenses and cover your mortgage permanently. You need to make sure you are allowed to host a tenant before you announce your search for a tenant. Your local council should be able to tell you what your options are in this regard. But if you have a finished basement or other separate room in your home that offers privacy, finding a tenant can be feasible – and be financially worthwhile.

3. Zoom out and move

You may have realized that you don’t even need 4,000 square meters of living space to feel comfortable. And you may be fed up with spending tons of money on heating and cooling this room. If you have overwhelmed yourself, the best thing to do is to list your current home and find a smaller one to move into. The good news is that the housing market is hot right now so you will likely get a good price for your home if you sell it. The bad news, however, is that there is a limited supply of smaller homes in the market so finding one to move into can be a challenge. But even if you can’t downsize right away, this should be on your radar when the real estate market opens, which could happen later this year.

If you’ve taken on too much house, you may be digging yourself into a deeper financial hole day by day. And you deserve better. Instead of messing around on your mistakes (hey, we all do them), find the best solution to overcome them. You may find that refinancing or taking over a tenant will help you stay in your home without breaking your budget. Or you decide that moving is the best solution. Either way, you’re not stuck, so finding the best choice for you is important.