When Is the Right Time to Use Your Home Equity?

The world economy is not yet in a good state and probably will not be back to normal for at least a few months or longer. Even economically strong countries like the United States and Canada are affected because of the crippling effects of the pandemic and other global issues. What does this mean and what can be done to alleviate this issue? One way to help the economy recover is for households to have more purchasing power so that they can use the money to help themselves and channel that money back into the economy. This is easier said than done since a lot of people have lost their source of income and many have still not yet recovered. So, where will the money come from?

Use Your Home Equity Now

A big part of the Canadian population are homeowners. Meaning, that a lot of people have home equity. Home equity is a financial asset that can be used as a source of funding or emergency funds. How can people access their home equity then?

Liquidating home equity is usually done by selling a home but that may not be easy to do now because of recent restrictions that were enacted in Canada to help control the housing boom as well as property prices. Because of this, there are a lot of mandates to navigate, requirements to meet, fees to pay, and needing to have at least a good credit score the qualify for certain things. For people who own home equity, refinancing their mortgage or getting a second mortgage might be an easier way to access their home equity through a home equity loan as opposed to selling their property.

Why Use Your Home Equity Now?

There is a lot of untapped value in terms of residential properties in Canada. The estimated value owned by homeowners sitting in property and houses are in the billions if not trillions of dollars. If a certain percentage of homeowners decide to tap their home equity, that will be money that can be re-injected back into the economy to restart businesses and help things move along as people are still reeling from the economic effects of the pandemic.

There is talk that using home equity could be a bit difficult or challenging for some people, but the truth is that some lenders have come up with less strict requirements these days. One thing to watch out for, though, would be the possibility of shifting policies and other regulations that the government may come up with in response to today’s trying times.

Does it Make Sense to Apply for a Home Equity Loan Now?

Interest rates remain at a historical low which means that the current terms are a lot friendlier for homeowners who might want to get a home equity loan such as A HELOC. With today’s interest rates of only around 4%, it means that someone will only need to pay around $33 in monthly interest if they owe about $10,000 for a HELOC. This figure will slightly vary based on specific home equity loans but gives one an idea of what to expect in terms of paying interest. This is a small amount considering the financial benefits of having an extra $10,000 to use for important matters.

If you’re thinking of using your home equity in 2022, do not hesitate to contact us whether you might be planning to refinance your mortgage or wanting to get a home equity loan. At Mortgage Central Canada, our offices are open to answer your questions and meet your needs. Contact us today.

Thinking of Using a Home Equity Loan? Here’s 4 Reasons Where it’s Worthwhile

Getting a home equity loan sounds like a relatively easy way to get access to some cash but not all uses for it are created equal. Just because you can qualify for it does not mean that you should get one, as using it the wrong way can end up costing you your home. If you feel that you really want to use home equity loans, then the following are the smartest reasons to do so.

Adding Value to Your Property with Home Improvement Projects

One of the smartest ways to use your home equity loan is to fund home improvement projects that in turn, increase the value of your home. Examples of this include adding another room, modernizing your kitchen and bathrooms, adding a patio, improving insulation, or converting your home into a smart home. Energy-efficient upgrades generally take less time than bigger overhauls and improve your quality of life while living in the property by a significant value too. This way you benefit before you even sell your home.

Using Home Equity for Debt Consolidation

If you have several high-interest debts, you might be paying a fortune in interest alone. By taking a home equity loan and using that to pay for your existing high-interest debts, then you can save a lot of money over the years and also save yourself the hassle of keeping track of several debts. With a home equity loan used for debt consolidation, you will have only one bill to think of.

Funding Investments

Whether as extra funding for your business or extra cash to use as a deposit for another property, you can put your home equity into good use by using it for money-making ventures for you. The key is to make sure that whatever income your business or investment property brings in is enough to cover the fee and the bills for your home equity loan. Do not use your home equity loan for anything that produces more liabilities than assets or you will incur more debt.

Paying for Higher Education

You can use home equity loans to get some funding to pay for higher education which in turn will improve your long-term financial status by increasing your income potential. Remember, be sure to use your home equity for things that will improve your life and add value to it in the long term.

Saving It for Emergency Expenses

Do you know that most families do not have enough cash to sustain them in case of losing their main source of income for a few months? Most do not have extra cash ready for use and therefore also do not have funds for emergencies. If you have a sudden large expense like medical bills or need a new vehicle, you can turn to your home equity to save the day.

Are you decided on getting a home equity loan? Then contact the mortgage professionals at Mortgage Central Canada so that you can be assisted and get your loan approved in as fast as 24 hours!

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!

Is It Time to Leverage Your Home Equity?

If your homeowner with equity, you can cash in and start making equity in your home work for you with a home equity loan. After all, you’ve been saving for years, making your payments on time, isn’t it time you started getting something back? This kind of mortgage, also known as a second mortgage, can help you remodel your home, start a business, pay for retirement, or help you buy a new home. Under the current mortgage rules, you can burn up to 80% of your home’s worth; you may not actually borrow this much though! Here were going to talk about equity, how one of our Toronto mortgage brokers can help you, and if this is the right choice for you.

What Is a Home Equity Loan?

After years and years of payments, you’ve started building value in your home, and that’s equity. The less debt you owe on your home, the more equity you have. As Canada mortgage brokers we can help you unleash the power of your home’s hidden equity to get the money you need for your next project.

But before we talk about qualifying for a home equity loan we need to talk about loan-to-value ratios or LtV. No one will ever get 100% loan to value, even with the 720 or above credit score. You’re most likely to get between 60% and 80%, and you’ll only be able to borrow up to 80% of your home’s value – and that’s after they subtract whatever you still own it. This is why you to have as much equity available as possible.

Who Can Qualify for a Home Equity Loan?

If you have equity you can qualify for home equity loan – the trouble is finding the RIGHT but home equity loan. When you work with us as your Toronto mortgage broker you’ll understand what your real options are. We don’t work for the banks, we work for you, so you’ll know what you’re supposed to be getting. Credit, employment history, and payment history all play a role in your eligibility.

Understanding the Risks of Borrowing

Anytime you borrow against your home there will be risks. What we can do as mortgage brokers is mitigate those risks, helping you understand if now is the right time to get a second mortgage on your home. After all, what’s the point going through with it if you’re only going to end up losing your home?

Let Us Help You

Working with us will help you save time, money, sanity, most importantly your home. We’ll help you understand if your lender is on the up and up, you can find a better deal somewhere else, or if maybe you should just wait to borrow against your home. A little time can do a lot of things for your credit, and the better your credit is, the better your mortgage terms will be. Visit our home equity loans page today, and see how much you could save on your next mortgage!

4 Fast Tricks to Build Home Equity

Building your home equity is one way to build wealth. After all, your home equity can be used as an emergency fund or even as funding for your next home. But how easy or how challenging is it to build home equity? What can you do to make sure that you gain equity the fastest ways?

Home equity grows over a period of time as you continue to pay your mortgage. It also grows when home prices in your area goes up as it is defined as the difference between what amount you owe and your home’s market value. For the fastest ways to build home equity, take a look at the tricks below.

Start With a Large Downpayment

Although paying the least amount for the required downpayment when buying property is tempting (more so if you have great credit), it will be in your best interest to go for the biggest downpayment that you can afford. A large downpayment means that you own a larger portion of your home’s value from the start, therefore letting you start home ownership with a substantial equity.

Pay More Toward The Amount You Owe

Paying more towards your principal will help you pay your home loan a lot faster. Do you know that just paying an extra month of mortgage payment per year can shave off 7 to 8 years of payments from your payment schedule. Paying off your home quicker means building equity at a faster rate.

If you’re not sure whether you’ll be able to afford paying an extra month a year, then start with paying a little over your required payment per month. The idea is really to just pay more towards your principal to cut your loan quicker. You’d be surprised at what an extra $100 and above per month can do.

Go for a 15-Year Mortgage Loan Instead of a 30-Year One

It is a common misconception that choosing a shorter-term mortgage loan means having to pay twice the monthly payment required for say, a 30-year loan. Once everything has been computed, you’d be glad to know that choosing a 15-year loan over a 30-year one can mean paying just a few hundred dollars more per month.

Although coming up with a few hundred dollars more per month may seem like a huge adjustment, the point here is to consider asking for computations based on shorter term loans. You might just be able to afford it and also allow yourself to build your home equity faster.

Choose Home Improvement Projects Wisely

Anything that can boost the market value of your home is a way to build home equity. This means that any renovations and additional features or upgrades you do will increase both the value of your home and your home equity.

The key here is to invest in home improvement projects that won’t empty your bank account yet give you huge returns. Examples are upgrading kitchen appliances (that can drastically increase your home’s value) or even just investing in some new turf for your front lawn (which adds a few thousand dollars to your home’s market value) for landscaping.

Now that you know how to build your home equity, it will also be great to know about how to use home equity to benefit you financially. Learn about second mortgages and the benefits of home equity loans by talking to us. Contact us if you would like to discuss more tips about using your home equity today!

Your Choices for a Home Equity Loan in Ontario

Determining the type of home equity loan that could be right for you can be very confusing and overwhelming even for the more seasoned homeowners who want to use their home equity. We’ll try to make things easier for you here by laying out your choices for a home equity loan in Canada.

Let’s Talk About Home Equity

Home equity is the real value that you own in your home. It is determined by taking away all existing debts from the professionally assessed current market value of the home. Say a home is worth $800,000 and the remaining debts and other liabilities total $180,000. That means that the home equity is $620,000.

The ability to build home equity is one of the biggest benefits of owning your home. Another is the fact that once you have home equity, you can access it or tap into it without having to sell your home. You just have to apply for a home equity loan.

Let’s Talk About What Is A Home Equity Loan

A home equity loan is a type of loan that is secured by the equity of one’s home. The home equity serves as collateral for the loan to be approved. Because it is a secured loan, it often has much more attainable requirements and friendlier interest rates.

You can apply for a home equity loan from a bank or a private lender. You can also opt to use the services of a mortgage broker to get better deals and terms.

Home Equity Loan Choices in Canada

If you are still paying your mortgage, you can choose a second mortgage. It got its name because it is second in position with regards to the priority of repayment if you fail to pay your obligations. Once approved, you will be able to access a huge percentage of your home equity as a lump sum that you have to pay within a stipulated time. Another good reason to get a second mortgage is that it allows homeowners to borrow against their home equity even when they have bad credit.

If you want flexibility and a friendlier-to-the-pocket interest rate, then a HELOC could be a good choice for you. This is especially true if you are planning to use your home equity for various needs through the next few months to years. With a HELOC, you will be able to access your home equity as revolving credit. You will only be charged interest on the amount that you use.

If you are a retiree, then a reverse option could be another option for you for a home equity loan in Canada. This is a bit more complicated, and your age will be a factor as well. Talk to us if you are interested in this choice for a home equity loan.

Overall, owning a home gives you a lot of freedom in how you want to use the value that you accumulated through real estate if you are not keen on selling. Contact us today and we will be glad to assist you to get approved for a home equity loan of your choice at Mortgage Central Canada.


How To Get A Homeowner’s Loan

A lot of homeowners these days are finding out that they can use their home equity to apply for a homeowner’s loan. It can sound quite simple at first glance but getting a homeowner’s loan can have some confusing steps that can cost you both time and money if you make some mistakes at any point of the process. In this article, we will tell you about the things to consider about how to get a homeowner’s loan.

Take A Look At Your Credit Report

Your credit report will tell lenders how good you are at staying on top of your financial obligations. This can make lenders either want to lend to you or avoid lending to you. Generally speaking, the bigger the institution that you are trying to borrow from, the more they will care about what is in your credit report.

Checking your credit report can alert you to wrong entries that may be dragging your score down. A few bills that were recorded as having delayed payment can have a huge impact on your report so correcting this can bring your score back up to lender-friendly levels.

Assess Your Options

Do not forget to do your research. When you are properly informed, you can avoid stressing yourself over small details that may not have an impact on the borrowing process. What you need to look into are mortgage rates, loan requirements, lender track record, and more. Make sure to consider your future financial standing when trying to assess which homeowner loan options and lenders will work for you. Things can look good now, but the situation can quickly change with just a couple of missed paychecks. Pick the borrowing option that will give you some elbow room in case you find yourself in a financial pickle. The last thing you want is to place yourself in an even bigger financial predicament.

Get A Mortgage Broker

It is not a weakness to recognize when you are possibly biting off more than you can chew. Finding a lender with good interest rates and who will be interested to lend to you can be a big challenge. By hiring a mortgage broker or using mortgage broker services, you will be availing yourself of access to a directory of trusted lenders whose terms are compatible with your financial situation and means. Because a broker will take charge of matching you with the right lender, you will save a lot on both money and time. Just take for instance getting a homeowner’s loan with Homebase Mortgages. If your requirements are already prepared, their mortgage broker services can get you a homeowner’s loan approval in as fast as a single day! Since they have an established relationship with lenders across Canada, you can be sure that the lenders are honest and will not take advantage of you. You may even find yourself having to pick from several offers of homeowner’s loans instead of scouring for a meeting to get a bank to lend to you. This will even out the playing field and ensure that the lender that you pick will have payment terms that are favourable for you.

Home Equity Borrowing Is More Popular Than Ever in Canada

More Canadians are using their home equity now for financial relief and it is not just because some people are struggling due to the COVID-19 pandemic. Quite a number of people are using their home equity to buy second homes and to fund investments while taking advantage of favourable terms that are available these days.

Why Borrow with Home Equity?

Using one’s home equity to borrow money come in many forms. As a homeowner, you can tap your home equity with the use of a HELOC, a second mortgage, a mortgage refinance, and a reverse mortgage. These options for home equity borrowing allow Canadians to withdraw money temporarily from the accumulated value that they built in their property without having to sell their property.  For example, a reverse mortgage gives borrowers a lump sum that they do not have to repay but just gets deducted when they sell their home. There is also a home equity loan that grants borrowers a certain lump sum that has to be paid in monthly installments. A HELOC gives borrowers access to a line of credit that can be reused until the date specified in the payment terms. And lastly, borrowers can choose to refinance their mortgage which can give them access to some extra cash if they applied for it at a favourable time.

Borrowing from one’s home equity gives the homeowner access to cash that they otherwise won’t have in a way that doesn’t overly burden them financially. Although borrowing with home equity comes with fees, requirements, interest, and more, this way of accessing cash is friendlier to the pocket than borrowing with unsecured loans or using other means such as maxing out one’s credit cards.

Borrowing with Home Equity Now

According to the latest industry data, lenders saw an increase of 14% to 200% when it comes to the various forms of borrowing using home equity between November 2019 and November 2020. The same industry experts report that they see this trend continuing this year because the low-interest rates for 2021 make conditions favourable for borrowers.

The demographics are changing a lot too. Using home equity for cash is no longer seen as mostly for seniors who are struggling. Borrowers these days tend to be homeowners who are doing great with their finances and are simply looking for ways to grow their wealth and make their money work for them better with the help of smarter financial planning.

With the above said, know that home equity borrowing is not new. This is a financial norm that has been growing stronger for the past 50 years as its own industry. People are more open now to using their home equity to give them more elbow room when it comes to financial decisions. It should be mentioned as well that with recent increases in property values in almost all of Canada, homeowners are simply wanting to enjoy the fruits of their wise investing decisions in the past. When used wisely, tapping one’s home equity can make some people more financially stable and in some cases, grow even wealthier!

Are you looking for ways to gather funds for your business projects or perhaps you are looking for more spending freedom? Contact us and we will be happy to discuss how using your home equity can do that for you!


Buying A Second Property? This is How You Fund It with Your Home Equity!

Do you know that one of the most popular reasons that Canadians tap into their home equity is to use the extra cash to buy a second property? Although having a second home may sound excessive to some, having a second home can mean a lot of things to different people.

Why Buy A Second Home?

Some people buy a second home to have a place to unwind in, such as a cottage or a summer home. Some people purchase a second property as an investment or a source of income such as in the case of rental properties. With the recent changes in the housing market and how difficult it may be for young couples to buy property, some parents buy a second property to give to their children, taking advantage of their long-established financial record to avail of better deals in the real estate market. With interest rates now at record-breaking lows, 2021 truly sounds like a great time to buy a second property and even better when you can do so with the help of your home equity!

Financing A Second Property with Home Equity

Unlocking your home equity is one of the best-kept secrets that homeowners have when it comes to buying a second property. Whereas some people may feel that they need to have hundreds of thousands in savings in order to put a deposit for a house, or some people think that they need to sell their current home to finance another one, the fact is that you can tap your home equity with a home equity loan and you’ll be able to turn your hard-earned asset into cash without having to let go of your current home.

There are several ways that you can unlock the equity in your home. You can choose to refinance your mortgage, apply for a HELOC, or opt for a home equity loan or a second mortgage. All of these choices will do a great job in unlocking your home equity, but they differ in how they can help you achieve your financial goals plus how they relate to your current financial situation. Each option got terms, conditions, fees, and other requirements that you may or may not qualify for. Some will put a lot of consideration on your credit score and income sources while some will basically only look at your home equity.

With the above said, lenders are much more lenient when the borrower is applying for a secured loan and much more so when the collateral is one’s home. They know that lending to people who are willing to put their home on the line have significantly lower risks than lending to other borrowers when it comes to non-payment or defaulting. More so, lenders know that someone who will use the cash to buy another home is likely someone who plans ahead when it comes to finances and thus, is also more likely to be approved fast.

Are you interested to use your home equity to purchase a second property? You can apply for a second mortgage, a HELOC, or get a mortgage refinance with our assistance. Contact us to avail of our 24-hour evaluation!