Buying on Home Equity

One of the most favourable aspects of owning real estate is the ability to leverage.  If you are in a good equity position with your home, then raising cash through an equity loan might help you with your goals.  You may wish to renovate, consolidate higher interest loans, or use the funds as a down payment on an additional real estate purchase such as a recreational property, chalet, cottage or investment property.  Of course you will need to qualify at your bank and show the ability to carry the costs, and not all banks will offer home equity financing.  The four most frequent ways of getting extra financing are refinancing with a new first mortgage, borrowing any amount you have prepaid on your morgage, obtaining a home equity line of credit, and taking out a second mortgage.  To evaluate which vehicle will work, you may want to sit down and work the numbers.  Questions to ask are: will the rate be fixed or variable? Is a blended rate available? Do I want a lump sum payment or amounts as needed?  What will be the home's appraised value, and what is the maximium debt ceiling?  What are the fees, including application fees and standby fees?  Loans leveraged against real estate give us some of the cheapest money out there, and a chance to realize financial growth when harnessed in a prudent way.

Coral Robinson, Broker, RE/MAX four season realty Collingwood, Thornbury, Blue Mountain

Coral Robinson B.A., Broker

RE/MAX four seasons realty limited, Brokerage
67 First St., Collingwood, Ontario, L9Y 1A2

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