While the economy is doing fine right now, it wasn’t that long ago that we experienced a tremendously difficult time – we were in a huge recession. Now, though, there are things you can do to prepare… just in case.
Prepping for a Recession: Tips for Homeowners
As a homeowner, you’re in a unique position. You have an asset that could turn into a liability overnight.
The reality is that 60 percent of homeowners carry mortgage debt. That can be a big problem if the economy goes south.
Here’s what you can do:
- Set up an emergency fund
- Look for ways to reduce your expenses now
- Look at your home as an asset
- Think about paying off your loan early
Here’s a closer look at each.
Recession Tip #1: Set up an emergency fund
It’s a good idea to have at least 6 months’ worth of living expenses stashed away. Saving is becoming increasingly hard, though. You don’t have to actually reach that lofty goal – but you should keep trying.
Recession Tip #2: Look for ways to reduce your expenses now
Mortgage rates are pretty low right now for qualified borrowers, which means it might be a good opportunity for you to refinance. Maybe you just want your payments to be more predictable – and if that’s the case, you can think about switching from an adjustable-rate mortgage, or ARM, to a fixed-rate mortgage.
Recession Tip #3: Look at your home as an asset
Find out now what it would take to tap into your home’s equity in the event of an emergency. You’ll definitely want to talk to a financial adviser before you make any big decisions, though.
Recession Tip #4: Think about paying off your loan early
If you’ve owned your home for a while, it might be time to think about making an early payoff – or even switching to a shorter-term loan to get a lower interest rate.
Are You Buying a Home or Land for Sale in Lake City?
If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.
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