Homeownership is a significant milestone in many people’s lives, representing stability, financial security, and a place to call home.
Beyond the joy of having a property, homeowners also gain a valuable asset known as home equity. In this blog post, we’ll delve into the concept of home equity, explore why homeowners tap into it, and discuss the various ways you can leverage this financial resource.
What Is My Home Equity?
Home equity is the difference between the current market value of your home and the outstanding balance on your mortgage.
As you make mortgage payments over time and if your home’s value appreciates, your home equity increases.
Example:
The current value of your home is $1,000,000 and the current mortgage balance is $450,000.
Your home equity = $1,000,000 – $450,000 = $550,000
Why Home Owners Use Home Equity?
There are many reasons to utilize home equity. Taking advantage of this financial tool allows homeowners to pursue many things they would not be able to pursue without home equity:
A) Home Improvements: Many homeowners use their home equity to fund renovations or upgrades, increasing the value of their property.
B) Debt Consolidation: Consolidating high-interest debts with a home equity loan or line of credit can be a strategic financial move, potentially reducing overall interest payments. Carrying credit card debt at 24.99%? Consolidate into your mortgage at the current mortgage rates (<5%).
C) Education Expenses: Home equity can help fund education expenses, making it an attractive option for parents (or grandparents) with college-bound (grand) children.
D) Emergency Expenses: In times of unexpected financial strain, tapping into home equity can provide a safety net to cover essential expenses. Setting up a Home Equity Line of Credit, in most cases, is free. Having access to this product line can provide you the certainty of having access to funds when / if needed.
E) Investments: Some homeowners use their home equity to invest in additional properties or other investment opportunities, potentially generating additional income.
How Can I Use Home Equity?
The versatility of home equity allows us to explore various options for using home equity:
A) Take Out a Lump-Sum Loan: depending on how much home equity you have and how much equity take-out you qualify, we have clients taking out $10,000, $50,000, $200,000 (any amount) in home equity.
B) Home Equity Line of Credit: provides benefits of a revolving line of credit, at the lowest industry interest rates.
C) Reverse Mortgage: homeowners age 55+ can access home equity with no income requirements.
For more on reverse mortgages, please visit our previous blog post.
Why Use the Team at Access My Home Equity?
Partnering with our team of licensed mortgage brokers brings numerous advantages when considering tapping into your home equity:
A) Expertise: our team is well-versed in the intricacies of home equity products. We always ensure that our clients receive personalized advice tailored towards their financial goals.
B) Access to Multiple Lenders: we have relationships with various lenders, expanding your options and increasing the likelihood of securing favorable terms.
C) Time and Cost Savings: we streamline the mortgage application process, saving you time and helping you secure a better deal.
D) Customized Solutions: we assess your unique situation and recommend the most suitable home equity solution based on your needs and financial requirements.
Industry Recommendation:
Home equity is a valuable asset for homeowners, offering numerous opportunities. If you’re unsure about how to leverage home equity effectively, don’t hesitate to contact our team of industry professionals. We offer complimentary consultations and are committed to providing expert advice and assistance to our clients.
Questions?
Reach out directly for any inquiries and questions below:
Igor Morgun | Mortgage Broker
Email: igor@morgun.ca | info@accessmyhomeequity.ca
Phone: 604-362-4467
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