Looking to finance a large purchase in the near future? With mortgage interest rates still near their all time lows, a home equity loan can provide a cost-effective way to lowering your borrowing costs.
Home equity loans offer you an additional financing option, allowing you to take out or borrow the equity built up in your home and use it to finance other expenses. The equity in your home is the portion of the home that you rightfully own. For example, if the value of your house is $400,000 and the outstanding mortgage balance is $160,000, then your equity in the home is $240,000.
Home equity loans offer you an additional financing option, allowing you to take out or borrow the equity built up in your home and use it to finance other expenses. The equity in your home is the portion of the home that you rightfully own. For example, if the value of your house is $400,000 and the outstanding mortgage balance is $160,000, then your equity in the home is $240,000.
When considering home equity loans, lenders will generally allow you to borrow up to 80% of the homes appraisal value without incurring mortgage insurance charges. So using the above example, you take 80% of $400,000 which is $320,000, minus the outstanding mortgage of $160,000, which leaves you $160, 000 that you could potentially borrow as a home equity loan.
Home equity loans are typically best suited for financing large purchases where it’s likely to take several years to pay it off. A major home-improvement project, purchasing another property, paying for your child’s university education or purchasing other assets such as a car or a boat would all be good candidates for considering a home-equity loan.
Many Canadians are also using the equity in their homes to borrow and pay for home improvements before putting their house up for sale. Adding a deck, or a new space, or taking care of problems in such areas as the roof, plumbing, doors or windows can help address the basic needs of potential buyers and help you sell your property at a premium and quickly.
Once you are committed to making a large purchase or financing a new project, utilizing the equity built up in your home can provide a financially sound and viable option for your financing needs.
If you have any questions about this article or if you would like to explore your mortgage financing options please call 416.303.4480 or visit my website at www.thescooponmortgages.com
If you have any questions about this article or if you would like to explore your mortgage financing options please call 416.303.4480 or visit my website at www.thescooponmortgages.com
Domenic Mirabelli
Mortgage Agent
Lic #M10000364
416.303.4480
domenic.mirabelli@migroup.ca
“Helping you find a mortgage and peace of mind”
No comments:
Post a Comment