Posts

Refinance Plus Improvement Mortgage

A refinance plus improvements can help you finally complete those home renovations you have always wanted to do! A conventional refinance enables a homeowner to borrow up to 80% of the fair market value of their home.

So, the equity a homeowner can access would be the difference between 80% of market value and the amount they currently owe outstanding on their current mortgage. This equity can be used for improvement on the home. But what if you go out and get estimates for the total cost of the project from a contractor and this isn’t quite enough money for the renovation project?

Well, these improvements also have the added bonus of potentially increasing the value of the home! A Refinance Plus Improvements Mortgage considers the post renovation (higher) value of the home, and allows a homeowner to borrow up to 80% of this increased home value.

Get your hard hats ready, and start renovating today!

Home Equity

Many people find that one of the easiest and most affordable ways to access money is through the equity that they have accumulated in their home. This is a very popular option, especially when you have an excellent first mortgage in place.

Canadians purchase homes for a variety of reasons. Some want the stability of owning their own home, while others also look at home ownership as an investment vehicle. No matter what the reason, the truth is that home ownership has proven itself to be a good stable investment over time, and one which many Canadians are profiting from.

Putting Your Home Equity to Work For You
While many people have chosen to purchase their first home during these times of lower interest rates, there has also been a large movement to refinance home loans and pull out equity for home improvements, investments, college expenses, and even high interest debt consolidation. Canadians have been borrowing against their home’s equity in record numbers, taking out billions of dollars in cash each year.

In years past, many saw their homes as a shelter of safety, yet today, they are more willing to borrow against the equity owned in their homes to further their investment portfolios, get out of debt, send their children to university, make improvements to their home, or even boost their RRSP contributions. Where home equity was once sat upon, today it is often used to one’s advantage.

While removing equity from your home can be a good idea, you should do so with caution and fully understand the benefits and possible risks.

The best thing you can do is to consult a licensed mortgage broker professional and financial planner to discuss opportunities to make your home’s equity work for you.