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Home Equity Loans

Home Equity Loans

Home Equity / Refinancing

It is not unusual for homeowners to access equity from the value of their property some time during the mortgage term.

Reasons vary: To do home improvements and repairs, to consolidate debt or get rid of high payments or higher interest loans, for further investments or property purchases, to assist with educations costs, to buyout an ex-spouse, etc.,– the reasons are endless.

The general rule is that a minimum of 20% equity must remain in the property at the time of access.

EXAMPLE:
If your home is worth $600,000 you can have up to a maximum of $480,000 total financing IF you are removing equity, leaving 20% – or $120,000 equity in the property at the time of refinancing.

With a current 1st mortgage of $400,000 you would be able to access a maximum of $80,000 provided it fits in your debt servicing.

You can do this by refinancing your entire mortgage to get the additional funds, or in some cases it may be better to add a second mortgage or Homeowners Line of Credit and keep your first mortgage as it is. Qualification is necessary and also the terms of your current mortgage could pose some restrictions.

If you are concerned that you may not qualify under current regulations or you have a restricted mortgage, there may be short term solutions for you that can bridge the time gap until your mortgage term is up and other options become available.

With many things to consider it is in your best interest to get good advice from a mortgage broker with access to a lot of mortgage products.

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Home Equity Loans October 2, 2017