Accessing your home's equity
Home equity, the difference between your home's market value and mortgage balance, can provide valuable financial opportunities.
1. Home Equity Loans:
A home equity loan allows you to borrow a lump sum based on your home's equity. It offers competitive rates and fixed repayment terms, making it ideal for specific financial needs like home improvements or debt consolidation.
2. Home Equity Line of Credit (HELOC):
A home loan health check will generally cost you nothing and could save you thousands. Your home loan features could be improved, or you could find yourself with a lower interest rate. A better payment structure could also be introduced, making your repayments more manageable.
Checking the state of your current loan could uncover the possibility of taking out additional finance, which can consolidate any other debt you may have, or help you purchase an investment property.
3. Considerations and precautions:
a. Understand the Costs: Each equity access method has associated fees, closing costs, and interest rates. Compare options to choose the most suitable one.
b. Plan for Repayment: Ensure you can afford the additional debt or modified mortgage. Create a financial plan to manage repayment effectively.
c. Protecting Equity: Avoid excessive borrowing to maintain a healthy equity position, protect yourself from market downturns and retaining ownership benefits.
5. Speak to the experts.
Accessing your home's equity offers a powerful financial tool to achieve various goals. By understanding the different methods available, associated risks, and benefits, you can make informed decisions to harness your home's equity for financial success.
Paying too much for a home loan?
See how we saved customers more than $6000 per year, just by reviewing their home loan.
