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Refinance

How to Access your Home Equity

Key Take-Aways

You may wish to use your home equity for renovations, investment, or to pay off consumer debt that is at higher rates of interest.

How can you access your home equity?

1.    A refinance of your existing mortgage – Depending upon the current rate of interest on your mortgage and the penalty to exit your existing term, it may make sense for you to pay out your existing mortgage and replace it with a new one at a lower rate.

2.    Adding a home equity line of credit – In some instances, clients are unable to break their existing mortgage term due to large penalties. In this instance, we recommend looking to add a home equity line of credit to your financing. With a mortgage and line of credit we can access up to 80% of your appraised property value.

3.    Blend and Extend – Some clients have higher than market rates, needs access to equity, but don’t want to pay a large penalty. In this case, some lenders will allow clients to add new funds, extend their term, and offer them a new blended rate of interest based on their existing term and the new funds borrowed.

4.    Re Advanceable Mortgages – If you are lucky enough to have a re-advanceable mortgage, you may be able to easily access the equity in your property that you have created by paying down your mortgage. These products are fantastic for clients who plan to be in their home long term as they create access to equity for no cost and with no qualification required.

All of these options could be a good fit for accessing your home equity. It is important to keep in mind that with options 1-3 you must re-qualify any time you are requesting new funds from the bank and may incur a new set of legal fees.

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