Most of us live in homes that are a work in progress with a mile-long list of remodelling projects. Unfortunately, the money isn’t always there when you need it most. With Canadian housing prices on the rise and mortgage rates at historic lows, now is the perfect time for homeowners to take out either a home equity line of credit (HELOC) or a home equity loan.
Using a HELOC to Unlock Equity in Your Home
If you’ve lived in your home for any period of time, you have built up equity. By refinancing with a HELOC or home equity loan , you can access up to 80% of your home’s value (less the mortgage). Many homeowners access that home equity to free up cash for everything from home renovations to vacations to their children’s tuition fees.
While both HELOCs and home equity loans sound similar and use your property as collateral, they operate on entirely different premises. A home equity loan provides you with a fixed amount of money, payable over a fixed period of time, usually with a fixed interest rate. Once you receive the money, you cannot get more from the loan. Essentially, a home equity loan operates like your primary mortgage does. With a HELOC, you can borrow funds up to the credit limit during a specific timeframe, called the draw period. You withdraw money as needed and only pay interest on the amount you use. On top of that, the money is available for use.
For the most part, the interest charged on a HELOC is calculated at a variable rate plus prime. The variable rate can vary drastically depending on which lending institution you use; some also offer a fixed-rate option.
Refinance and Remodel with a HELOC
While many people remodel their homes to meet the growing needs of the whole family, others like to do so simply to increase the value of their property. Your home may be sorely outdated, but if you don’t have an emergency fund, the lime green bathroom tiles and matching sink will just have to wait.
Or maybe they don’t. A HELOC or home equity loan could be the answer if you want to make home improvements to your property in Toronto but can’t accommodate the upfront costs. And it’s a great way to tap into your home’s equity.
Tackle Home Remodelling Projects
The most expensive room in the house to remodel is the kitchen; it’s also a home’s top selling feature. With a HELOC, you don’t need to hold off remodelling your outdated kitchen or bathroom, as it gives you the freedom to make needed renovations when you want.
Get Your Home Repairs Done Right
It’s very simple: you get what you pay for. Doing a home renovation on your own or hiring the cheapest contractor could end up costing you more in the long run. Refinancing with a HELOC is the best way to ensure your home renovation job is done properly.
Maximize Your Home’s Potential
Your home is a major investment and home improvements can significantly increase its value. In today’s red-hot real estate market, home improvements could help you maximize your investment if you decide to sell.
Renovation Via Canadalend.com
If you’re thinking of doing a home renovation to increase the usability and value of your property,Canadalend.com can help. The independent, licensed refinancing experts at Canadalend.com can help you determine what your best options are. We evaluate your current financial situation and help you find the lender best suited to your financial and lifestyle needs.
For more information on a HELOC or home equity loan, contact Canadalend.com to set up a free consultation, or apply online and one of our private mortgage specialists will assist you in setting up an appointment at your earliest convenience.