Turn Your Home Into A Piggy Bank by Borrowing From Your Home Equity

Finances can be tight these days for a lot of Canadians. Luckily, if you are a homeowner in Canada, you can tap into your personal bank by making use of your home equity via a second mortgage or a home equity line of credit.

Most people think of owning a home as an investment and they are right, but not a lot of people think of their home as a handy source of funds in a time of need. Yes, it is possible to get some cash out of your home without having to sell your property by accessing your home equity.

Use Your Home Equity

First, what is home equity and how can you use it? Your home equity is the value that you own in your home. You can easily estimate your home equity by subtracting any remaining mortgage or debts from the current market value of your home. You can access it by applying for a second mortgage or a home equity line of credit. These are types of secured debts that use your home equity as collateral and therefore would have much friendlier terms as well as interest rates as compared to other loans.

HELOC versus Second Mortgage

Both a HELOC and a second mortgage allow a homeowner to access their home equity by getting a loan secured against it. With a second mortgage, the funds approved for the loan are approved as a lump sum and the monthly repayments are a fixed amount. With a home equity line of credit, the homeowner is given a line of credit that they can withdraw from as they see fit at any time during the loan period. Payments for a HELOC vary by month and the interest rate often varies as well.

The beauty of a second mortgage lies in its predictability as well as the lump sum access to the loaned amount. People who apply for a second mortgage often use the funds for big expenses such as paying for a home renovation. Compared to a second mortgage, a HELOC is more flexible. This can be advantageous for people who need extra cash every now and then in the near future. They can repay what they use in the HELOC’s credit limit and are only charged interest for the amount they borrow. Flexibility is why a lot of people choose to get a HELOC over a second mortgage.

Uses for A Home Equity Loan

A second mortgage and a HELOC are both home equity loans that can give temporary financial relief to homeowners when they need cash that cannot be covered by savings alone. Instead of applying for a regular loan or using a credit card that comes with sky-high interest, a home equity loan is friendlier for your pocket and oftentimes easier and faster to process. Funds from a HELOC or a second mortgage can be used to pay for school, fund home renovations, jumpstart a business, or pursue a life-long dream.

Borrow from Your Home Equity in 2021

Almost nothing has changed when it comes to borrowing from your home equity. With Mortgage Central Canada, you can start the home equity loan application process from the comfort of your own. If you’re a homeowner and have the requirements in place, processing can be as fast as a single day! Contact us today!


Open Up the Tap on Your Equity with a Home Equity Loan

You’ve been making timely payments all these years, isn’t it time your home started to give a little back? With the right mortgage broker (us!) and a home equity loan you can get all the money you need to consolidate your debts, send your kids to university or even start a business. With any kind of equity loan the devil is in the details and you don’t want to try and negotiate this one your own. Let’s explore how they work and why you would want one.

What is Equity?

If you don’t know, equity is how much you have invested in your home. If your mortgage(s) are completely paid off you have 100% equity. If you’re still paying off half your house you have 50% equity. You can figure out how much equity you have in your home by subtracting the remaining debt from the most recently appraised value of the home. This way you’ll be able to know exactly how much of a home equity loan you can take out.

Don’t Take Out a Large Home Equity Loan

Just because you’re approved for a big amount doesn’t mean you should actually borrow that much! You’ll want to work with one of our Toronto mortgage brokers; we understand the market, the tricks lenders pull and we’ll work hard to help you get the best equity loan possible. Every situation is different, don’t take a cookie cutter mortgage that just isn’t in your best interest. Also be careful about what the terms are before you sign on that dotted line.

Plan Ahead

When it comes to home equity loans you need to have a plan for the future. Why are you borrowing this money? Will you get some kind of return on it? Are you going to be able to pay it back? How much will you need to pay each month to pay back your home equity loan? If you don’t know the answers to these questions one of our Canada mortgage brokers can help. We have a lot of experience when it comes to home equity loans and we’ll be able to show you how to get the right loan.

Your Equity is Important

Each time you make a mortgage payment you’re socking away money for the future – that future is now. Why should you get robbed of your equity because you didn’t know any better? We’ll work with you to help you understand your rights and obligations as a borrower and to really understand what you’re signing. From finding the right mortgage lender to signing we’ll be there with you for every step of the way.

You’ve worked hard for your home and you shouldn’t have to lose it. Working with us as your Toronto mortgage broker will help you not only get the money you need now but keep your home in your future for years to come. Don’t get a bad deal, get the right deal!

Discover our home equity loans today!