Everybody is feeling pinched financially as interest rates and inflation surge. If borrowing to pay off your mortgage suddenly got more expensive, you may be reeling or worried about the future. Thankfully, the home that feels like it’s weighing you down also contains the answers to your problems.
Let’s check out some ways homeowners can leverage their assets to access cash and stabilize their finances.
Many people shudder when they think about a second mortgage because it calls to mind financial struggles. However, mortgage refinancing in Ontario is an extremely common way for homeowners to capitalize on the hard-earned equity they’ve put into their homes.
If you match with the right second mortgage lender, you can avoid bad credit and save up to $1,000 a month. Second mortgages tend to get quick approval because the value you’ve built up in your home speaks for itself.
People are free to use the funds from their second mortgage however they want, though it’s wise to be judicious, as non-payments may result in losing one’s home. Typically, people reinvest it in their home for renovations, pay down or consolidate debts, or use it for emergencies. Homeowners are free to do whatever they want under their own roof, and they’re just as free to spend the money they yield from its equity, too.
Home Equity Line of Credit (HELOC)
Sometimes homeowners need a surge of cash for investment opportunities, emergencies, or something else. It’s not always easy to know the precise dollar amount required, as ongoing situations are in flux.
Home equity lines of credit, or HELOCs, are perfect for this scenario. No homeowner should be denied badly needed funds when they own such a valuable asset to draw on. Find a mortgage broker who works with people of all credit, income, and debt levels.
First, an independent assessor will determine your current home’s market value. The amount paid on the mortgage gets subtracted from this, and the resulting sum is your home’s equity.
The longer you’ve owned your home, the more you’ve paid down, and the better borrowing terms you’ll get.
Home Equity Loan
A home equity loan is like a HELOC, except the homeowner receives one lump sum they borrow at a given rate rather than an ongoing loan they repay as they borrow. Some mortgage brokers can help unlock 85% of your home’s value, rather than the standard 80%.
Ultimately, the leading mortgage brokers work closely with clients, hearing their needs, lifestyles, financial goals, and the issues they face. Based on that, they’ll provide custom guidance and tell you whether a HELOC, home equity loan or second mortgage is right for you. Then, they’ll help secure the best borrowing terms possible, saving you money when it’s needed most.
As life gets more expensive, homeowners are wise to maximize their financial return from what’s probably the largest purchase they’ll ever make. Homeowners may not feel particularly wealthy amid rising rates and inflation, but equity can be a lifeline that keeps you afloat.