Once you have paid off your mortgage, you have a few options of what to do next. Suddenly, you have some extra money lying around that usually goes towards your mortgage. You can save this money or add it to your monthly budget.
Most people pay off their mortgage later in life and put the money towards their retirement. You could renovate your home, go travelling or enjoy a few months of relaxation.
Here are a few options of what to do when your mortgage is paid off.
Live in the property
You don’t have to do anything. Continue to live in the home mortgage-free and make the most out of the extra cash on the side. We spend so much time jumping from home to time that we often forget to enjoy the space.
You could start making some improvements to the home with the money you are saving. Add a loft conversion to the home or renovate your kitchen with plenty of modern appliances. It’s time to reward yourself for paying off the mortgage and reaching a major milestone.
Rent out the home
If you want to go travelling, you could rent out the home to a tenant. You can make some income while you travel the world – win, win! Try to find a tenant with a good track record and let them know when you will be returning to the property. Start with a short-term contract of around six months for when you are travelling.
Apply for an equity release
If you are over 55, you can opt for an equity release and access some funds from your home’s equity. You can use this equity for whatever you like, such as starting a new business or renovating the place.
You can sell the property and move to a small home that is less demanding. Big family homes can feel a little too roomy when we grow older, and the children move away. You can use the profits from selling the house to renovate your next home. Settle down in a smaller property and decorate it just the way you like it.
You don’t have to spend money. You can put the money that would usually go towards your mortgage in a savings account instead. Save the money for a new car or a once in a lifetime holiday. It’s easy to get used to the extra money in your bank account. You are far better off saving the funds for something exciting than wasting it on useless items.
Make the most out of your property and decide what you want to do with it.