If you currently own a house, you’ve likely built-up equity because your home has appreciated significantly in value over the last two years. You’ve always wanted to “get ahead” and now is your opportunity to do so using this equity in your home in a constructive way. Equity is essentially the money or cash you have tied up in the physical structure of your home.
Here are a few strategies that our clients have used and so can you!
Equity Leveraging for Second Property
Leveraging equity in your primary residence to purchase another property such as a cottage or rental is an option many people are exploring now.
The best approach if you want to purchase another property is to be proactive. Planning is critical, even if you feel that purchasing the next property is a year away. Because rates are low now, there may be an opportunity to lock in your current mortgage for another five years, while getting a secured line of credit at the same time, which can be used for the down payment on the next property you purchase. This way you save now and have the money available and waiting for when you are ready to pull the trigger for the next property.
Equity Leveraging for Paying Off Debt
Use the equity in your home to clear off high-interest debt with a single payment.
You may think that using a line of credit is the best approach to clearing off high-interest debt. This isn’t typically the case, and most of our clients have better options for paying off debt. Secured lines of credit are often difficult to pay off so it just exacerbates your inability to pay off high-interest debt. Instead of continuing to pay interest on the debts you owe, take advantage of the increased value of your home to take out equity and pay off your debts in full. When you contact our office, we’ll help you run scenarios on what might work best and which debts to pay off from the equity in your home, while still being on track to pay off your mortgage within your expected timelines.
Equity Leveraging to Help With Your Kid’s Down Payment
Helping your kids buy their first home when home prices have increased so significantly is the
You’ve likely already heard how difficult it is to buy your first home in 2022. You may also have children who want to purchase a home soon but need a healthier down payment in order to do so. Using the equity in your home to help your children raise the down payment to purchase their first house is now more common than ever. At the beginning of 2022 we have seen 4 out of 10 parents helping their children through a down payment gift. We also recommend the option of acting as a co-signer as a viable solution to help your children secure their first piece of real estate.
We love helping people and we do an excellent job! If you’re looking for advice from some real experts and you’re frustrated and tired of your bank or even another mortgage broker we’re here to help you!
Please book an appointment here – we meet everyone virtually now so it’s super easy to explore what your options are!