What is an Equity Take Out Mortgage?
If your home is worth more than your mortgage then you likely have money that you can access in order to use for other purposes. The reasons for accessing equity in your home are numerous but here are a few that come to mind:
- Home renovations
- Investment in other real estate properties
- Investment in the stock market or other equities
- Financing your children's tuition
- Accessing down payment money for the purchase of a recreational property
- Investment in a small business or a franchise
- Borrowing to make a substantial contribution to a RRSP or RESP and take advantage of low mortgage rates versus traditional personal loans
- Debt consolidation
- Purchasing a boat or motor home or dream vacation
If you already have a mortgage then an Equity Take Out mortgage can take the form of either a second mortgage or an additional loan secured by your first mortgage. This additional loan product is priced at first mortgage interest rates and is only available through lenders who offer a re-advanceable mortgage which your current lender may or may not offer. In either case the additional funds you are borrowing can be set up as either a fixed or variable rate mortgage for a set amount with principal and interest payments or it can be a Line of Credit (see my previous blog under ‘Mortgage Tips') with interest only payments.
To find out how much equity you have available and what the monthly payments would be please feel free to give me a call. I can also let you know what type of mortgage you currently have and the most cost effective way to access the equity in your home.
For more information regarding the Home Buyers Plan please feel free to contact me.
Jerry Sims is a mortgage broker with Ambro & Associates Mortgage Consultants Ltd. with over 20 years of lending, banking and financial planning experience. A highly satisfied and loyal client base can attest to Jerry's knowledgeable, creative and caring service that rises above and beyond expectations. Jerry has worked at several financial institutions in the capacity of loans officer, branch manager and credit manager.
Please feel free to ask John for an endorsement if you would like to know more about my services.