Need Help Financing Your Mortgage?

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Mortgage payments can be expensive, but homeownership is a great investment in your future since your home will only increase in value as time goes by, helping to fight inflation.

However, sometimes you might need a little extra help paying for your house. Whether your regular job isn’t cutting it or you’re looking for creative financing options to help you buy a new house while paying off another one, there are more creative ways to pay for a house and reduce your overall costs of living. 

With creative financing solutions, you can purchase the home of your dreams and pay it off without using your income from a regular job.

Finding creative ways to finance your investment is easy as long as you know the different options available.

If you’ve decided it’s time to buy a home, or you want to reduce your monthly mortgage payment burden, check out these creative mortgage financing options. 


1. Cash-Out Refinance



A cash-out refinance is a transaction that allows you to use your home’s built-up equity. Essentially, you’ll borrow enough money just to pay off the mortgage and keep the difference to earn more money on your investment.

Interest terms are usually more favorable than traditional home equity loans with a cash-out refinance. Additionally, the interest on a refinance is tax-deductible, so you’ll earn more money while reducing your tax liability. 

Unfortunately, there are risks associated with cash-out refinances because the term of the loan gets reset, which means you’ll spend another thirty years paying off your home.

In addition, if something happens, such as a job loss, new monthly payments can be difficult to pay.

However, if you want to make some money on your house to spend on other investments, such as a second house to rent out, it could be a good source of money. 


2. Home Equity Line of Credit

A home equity line of credit allows you to borrow money against your home’s value. Similar to a cash-out refinance, interest is tax-deductible, but there is a limit of $100,000.

A home equity line of credit is typically best for home repairs or situations where you don’t need large sums of money.

It can be used for investment properties, such as rentals, so you can upgrade the kitchen without spending too much money out of your pocket. 


3. Personal Loan

You can take out a loan to pay off another loan. For example, you can take out a personal loan to pay your monthly mortgage bill.

While a mortgage loan doesn’t come with tax benefits, it can be a great option if you’re having financial problems that you expect to be short-term, such as a job loss. 

There are some major benefits to using a personal loan to pay off your mortgage, including the fact the house itself is not put up as collateral.


Additionally, personal loan terms are typically much shorter than a mortgage loan. That being said, you can expect higher monthly payments if you aren’t careful.

Personal loans should only be used to finance your mortgage when you don’t have enough funds to pay your mortgage out of pocket because personal loans will end up costing you more in the long run.


4. Seller Financing

Seller financing allows you to use as little of your own money as possible while relying on the funds from someone else. In seller financing, the property seller agrees to hold the mortgage bill, and you’ll pay a monthly payment directly to the seller until the note is paid off.

This only works if the sellers own their home and don’t mind the agreement, which can be difficult to find for regular homebuyers. 


5. House Hacking

One of the easiest ways to finance your mortgage is to house hack. House hacking involves buying property and renting out a unit to someone else.

Ultimately, the tenant will pay towards the mortgage of the house while you build equity and maintain the property.

House hacking typically works best for multifamily properties, such as small apartment complexes or condos, but it can be a great option for homeowners as well. 

If you’re comfortable taking on a roommate, you can start to earn passive income that’s used to pay off your mortgage without the need to get a second job. In this case, you’ll act as the tenant’s landlord, which means taking care of all the maintenance around the house.

Therefore, it’s best to do your research and decide if you can handle a roommate or have a family member join you during this process. 


6. Rental Properties

Buying rental properties can help you finance your mortgage slowly over time. If you’re able to buy two houses, you can live in one and rent out the other to start earning a passive income.

Because rents can be higher than mortgages, especially in the area, you can build equity on both properties while using the rent payments from one to pay for part of another mortgage. 


Can You Buy Property Without a Loan?

Some people can purchase property without taking out a loan, especially if they’re already homeowners and selling their current house. By downsizing (moving to a new home with less space) and living off of their income, they can purchase a new home with the money they earned by selling their old home.

Additionally, if two adults are working, the homeowners may not even need to use both incomes to purchase a home and pay for a mortgage, allowing them to put one person’s entire salary into savings. 

People who own homes with equity can take their profit from selling their homes and move somewhere with a lower cost of living to ease their financial burden and allow them to save more money for retirement. 


Final Thoughts

First-time home buyers have many options when choosing a home loan, but it will all depend on their debt, income, and down payment.

However, once you’ve purchased a home, you can use any one of these creative ways to finance your mortgage to reduce your financial burden and start saving more money while building equity. 

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Julia Olivas graduated from San Francisco State University with her B.A. in Communication Studies. She is a contributing writer at where she loves sharing her passion for digital marketing and content creation. Outside of writing, she loves cooking, reading, making art, and her pup Ruby.

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