Did you know that you MIGHT be able to access your home's existing equity to pay for any upcoming projects or home upgrade's you might have planned? Maybe you have a child heading off to post secondary and you need some help to pay tuition and living expenses.
Common Questions:
How much equity can I use?
Depending on your location and other factors, you could potentially borrow up to 80% of your home's appraised value minus any existing mortgage you might have - for example....
You own a home with an appraised value of $300,000 and you have a current mortgage balance of $180,000.00
$300,000 x 80% = $240,000
$240,000 - $180,000 = $60,000.00 available for equity take out.
When is the best time to pull equity?
The best time to refinance and pull equity is at your renewal time. During renewal you are able to freely shop around and there are no penalties for switching lenders or refinancing.
What if I'm not at my renewal date and I would still like to do an equity take out?
It's still possible - but it would likely be in the form of a second mortgage, which means a 2nd mortgage payment. If you are locked into a term with a lender you will likely face penalties if you break the term so you'd be wise to either wait for renewal or take on a 2nd mortgage setup with the SAME term length as the remaining term on the first mortgage. WHY? Once both come up for renewal at the same time, there's a opportunity to possibly combine them into one payment again.
