How to Get Money Out of Your House Without Selling

Owning a home is a significant investment, and it can be a valuable source of financial security. However, there may be times when you need to access the equity in your home without having to sell it. Fortunately, there are a number of ways to do this.

1. Home equity loan or line of credit (HELOC)

A home equity loan is a secured loan that allows you to borrow against the equity in your home. The money you can borrow is typically based on a percentage of your home’s value minus the amount you still owe on your mortgage. Home equity loans can be used for a variety of purposes, such as consolidating debt, making home improvements, or paying for education or medical expenses.

Benefits of a home equity loan:

Fixed interest rate: Home equity loans typically have fixed interest rates, which means your monthly payments will stay the same for the entire term of the loan. This can be helpful for budgeting and planning.
Tax-deductible interest: If you use the proceeds of a home equity loan for home improvements, the interest you pay on the loan may be tax-deductible. This can save you money on your taxes.
Access to a large sum of money: Home equity loans can provide you with a large sum of money that you can use for a variety of purposes. This can be helpful if you have a large expense that you need to cover.

Drawbacks of a home equity loan:

Secured loan: A home equity loan is a secured loan, which means that your home is used as collateral for the loan. If you default, the lender could foreclose on your home.
Closing costs: Home equity loans typically have closing costs, which are fees associated with obtaining the loan. These fees can add up to several thousand dollars.
Risk of losing your home: If you are unable to make your monthly payments on a home equity loan, you could lose your home.

HELOC

A home equity line of credit (HELOC) is a revolving line of credit secured by your home’s equity. With a HELOC, you can borrow money as you need, up to a predetermined credit limit. HELOCs typically have variable interest rates, which means that your monthly payments can fluctuate.

Benefits of a HELOC:

Flexibility: HELOCs offer flexibility because you can borrow money as you need it. This can be helpful if you have unexpected expenses.
Interest is only paid on the amount borrowed: With a HELOC, you only pay interest on the amount of money that you borrow. This can save you money on interest charges.
Potential tax benefits: If you use the proceeds of a HELOC for home improvements, the interest you pay on the loan may be tax-deductible.

Drawbacks of a HELOC:

Variable interest rate: HELOCs typically have variable interest rates, which means that your monthly payments can fluctuate. This can make it difficult to budget.
Risk of losing your home: If you are unable to make your monthly payments on a HELOC, you could lose your home.
Fees: HELOCs typically have fees, such as annual fees, transaction fees, and inactivity fees.

2. Cash-out refinance

A cash-out refinance is a new mortgage for more than the amount you owe on your existing mortgage. The difference between the two amounts is given to you in cash. Cash-out refinances can be used for a variety of purposes, such as consolidating debt, making home improvements, or paying for education or medical expenses.

Benefits of a cash-out refinance:

Lower interest rate: If you have a high interest rate on your existing mortgage, you may be able to lower your monthly payments by refinancing to a lower interest rate.
Access to a large sum of money: Cash-out can provide you with a large sum of money that you can use for a variety of purposes.
Potential tax benefits: If you use the proceeds of a cash-out refinance for home improvements, the interest you pay on the loan may be tax-deductible.

Drawbacks of a cash-out refinance:

Closing costs: Cash-out refinances typically have closing costs, which are fees associated with obtaining the loan. These fees can add up to several thousand dollars.
Higher monthly payments: If you refinance to a longer loan term, your monthly payments may be higher than on your previous mortgage.
Risk of losing your home: If you are unable to make your monthly payments on a cash-out refinance, you could lose your home.

3. Reverse mortgage

A reverse mortgage is a loan available to homeowners 62 years of age or older. With a reverse mortgage, you do not have to make monthly payments. Instead, the lender gives you a lump sum of cash or a line of credit. The loan is repaid when you sell your home, move out, or pass away.

Benefits of a reverse mortgage:

No monthly mortgage payments: With a reverse mortgage, you do not have to make monthly mortgage payments. This can free up your cash flow for other expenses.
Access to a large sum of money: Reverse mortgages can provide you with a large sum of money that you can use for a variety of purposes, such as paying for medical expenses, supplementing your retirement income, or making home improvements.
You can stay in your home: With a reverse mortgage, you can stay in your home as long as you meet the loan terms. This can be important for seniors who want to age in place.
The loan is non-recourse: A reverse mortgage is a non-recourse loan, which means that you cannot owe more than the value of your home. This protects your heirs from being responsible for any debt if the value of your home declines.

Drawbacks of a reverse mortgage:

Reduced equity in your home: As you draw money from a reverse mortgage, the equity in your home will decrease. This can reduce the amount of money that your heirs will inherit.
Higher interest rates: Reverse mortgages typically have higher rates than traditional ones. This can increase the cost of the loan over time.
Fees: Reverse mortgages typically have fees, such as origination fees, mortgage insurance premiums, and servicing fees. These fees can add up to several thousand dollars.

4. Rent out a room or space in your home

If you have a spare room or space in your home, you can rent it out to a tenant. This can be a great way to generate monthly income.

Benefits of renting out a room or space in your home:

Monthly income: Renting out a room or space in your home can provide you with a steady stream of monthly income.
Help with expenses: The income you earn from renting out a room or space in your home can help you pay your mortgage, property taxes, and other expenses.
Companionship: Having a tenant can provide companionship, especially if you live alone.

Drawbacks of renting out a room or space in your home:

Loss of privacy: Renting out a room or space in your home means that you will have less privacy. You will need to be willing to share your home with another person.
Potential for conflict: There is always the potential for conflict when living with another person. You will need to be able to communicate effectively and resolve any disagreements that may arise.
Additional responsibility: Renting out a room or space in your home comes with additional responsibility. You will be responsible for maintaining the rental space and addressing any problems.

5. Take in a boarder

A boarder lives in your home and pays for rent and meals. This can be a good option if you are looking for someone to help with chores or companionship.

Benefits of taking in a boarder:

Monthly income: Taking in a boarder can provide you with a steady stream of monthly income.
Help with chores: A boarder can help you with chores around the house, such as cooking, cleaning, and yard work.
Companionship: Having a boarder can provide you with companionship, especially if you live alone.

Drawbacks of taking in a boarder:

Loss of privacy: Taking in a boarder means that you will have less privacy. You will need to be willing to share your home with another person.
Potential for conflict: There is always the potential for conflict when living with another person. You will need to be able to communicate effectively and resolve any disagreements that may arise.
Additional responsibility: Taking in a boarder comes with additional responsibility. You will be responsible for providing meals and a place to live for the boarder.

6. Start a home-based business

If you have a skill or talent that you can market, you can start a home-based business. This can be a great way to earn money while still being able to stay at home.

Benefits of starting a home-based business:

Be your boss: When you start a home-based business, you are your boss. This means that you have the freedom to set your hours and work on your terms.
Work from home: Starting a home-based business allows you to work from home. This can save you time and money on commuting.
Be more flexible: Starting a home-based business can give you more flexibility in your schedule. This can be helpful if you have children or other caregiving responsibilities.

Drawbacks of starting a home-based business:

Time commitment: Starting a home-based business can be a lot of work. You will need to be willing to put in the time and effort to make your business successful.
Lack of social interaction: Working from home can be isolating. You may miss the social interaction that comes with working in an office.
Distractions: When you work from home, there are many distractions that can pull you away from your work. This can make it difficult to stay focused and productive.

7. Participate in a home-sharing program

Home-sharing programs allow you to rent out your home to travelers for short periods of time. This can be a great way to earn extra income, especially if you live in a popular tourist destination.

Benefits of participating in a home-sharing program:

Extra income: Home sharing can provide you with extra income that you can use to pay for expenses or save for the future.
Meet new people: Home sharing allows you to meet new people from all over the world. This can be a great way to learn about different cultures and perspectives.
Flexible scheduling: Home sharing allows you to rent your home on your terms. You can choose when you want to rent out your home and how long you want to rent it out.

Drawbacks of participating in a home sharing program:

Loss of privacy: Home sharing means that you will be sharing your home with strangers. This can be a loss of privacy for some people.
Potential for damage: There is always the potential for damage to your home when you rent it out to strangers. You will need to take steps to protect your home from damage, such as purchasing insurance.
Additional responsibility: Home sharing comes with additional responsibility. You will be responsible for cleaning your home before and after each guest, and you may need to be available to answer questions from guests.

8. Sell unwanted items

Take some time to declutter your home and sell any unwanted items. You can sell items online, at a garage sale, or to a consignment shop.

Benefits of selling unwanted items:

Extra income: Selling unwanted items can provide you with extra income that you can use to pay for expenses or save for the future.
Declutter your home: Selling unwanted items can help you declutter your home and create more space.
Reduce your environmental impact: Selling unwanted items can help reduce your environmental impact by keeping items out of landfills.

Drawbacks of selling unwanted items:

Time commitment: Selling unwanted items can be time-consuming. You will need to take the time to price, photograph, and list your items.
Effort: Selling unwanted items can be effortful. You will need to pack and ship items or meet with buyers in person.
Potential for scams: There is always the potential for scams when you sell items online. You will need to be careful to avoid scams.

9. Get a roommate

If you have a spare room, you can get a roommate. This can help you save money on rent and utilities.

Benefits of getting a roommate:

Save money on rent and utilities: Getting a roommate can help you save on rent and utilities. This can free up your cash flow for other expenses.
Have someone to share chores with Having a roommate can help you share chores with someone else. This can make chores less of a burden.
Have someone to socialize with: Having a roommate can give you someone to socialize with. This can be helpful if you live alone.

Drawbacks of getting a roommate:

Loss of privacy: Getting a roommate means you will have less privacy. You will need to be willing to share your home with another person.
Potential for conflict: There is always the potential for conflict when living with another person. You will need to be able to communicate effectively and resolve any disagreements that may arise.
Lifestyle differences: You and your roommate may have different lifestyles. This can lead to conflict if you are not able to compromise.

10. Take on a part-time job

If you have the time, you can take on a part-time job to earn extra money.

Benefits of taking on a part-time job:

Extra income: Taking on a part-time job can provide you with extra income that you can use to pay for expenses or save for the future.
Gain new skills: Taking on a part-time job can help you gain new skills. This can make you more marketable in the job market.
Get out of the house: Taking on a part-time job can help you get out and meet new people. This can be helpful if you are feeling isolated or bored.

Drawbacks of taking on a part-time job:

Time commitment: Taking on a part-time job can be a time commitment. You will need to balance your work schedule with your other commitments, such as family and school.
Fatigue: Working two jobs can be tiring. You may find that you are more fatigued than usual.
Stress: Working two jobs can be stressful. You may find that you are more stressed than usual.

Additional options

Rent out your driveway or parking space
Become a pet sitter or dog walker
Offer your services as a handyman or gardener
Participate in paid online surveys or focus groups
Rent out your belongings on a peer-to-peer rental platform

Considerations

Before tapping into your home equity, it is important to carefully consider the pros and cons. Home equity loans and lines of credit can be a good way to access cash quickly, but they can also be risky. If you are unable to make your payments, you could lose your home. Reverse mortgages can be a good option for seniors who need extra income, but they can also reduce your heirs’ inheritance.

It is also important to be aware of the fees and costs associated with each option. For example, home equity loans and lines of credit typically have closing costs, and reverse mortgages have origination fees and mortgage insurance premiums.

If you are considering tapping into your home equity, it is important to speak with a financial advisor to discuss your options and make sure that you are making the best decision for your circumstances.