Before you start looking at home equity loans, or Canadian second mortgages, there are some things you need to know. When you choose us as your Toronto mortgage broker we’ll be able to help you understand everything you need to know – but until then, we’re going to go over some super important points here. From understanding the differences between a home equity line of credit and a second mortgage, to what you can expect from your terms when you shop on your own, we’ll cover it all here. Let’s get started!
What is a Second Mortgage?
A second mortgage and allows you to turn the equity in your home into cash you can use – remodel your home, buy a car, pay for your kids Uni courses, just make sure that whatever you’re using it on will give you some sort of return. A second mortgage is not free money and you’ll want to be very careful about how you spend it. Working with one of our Canada mortgage brokers, you’ll be able to figure out what’s right for you. You may not even need a second mortgage – you might just need to refinance your first one.
What is a Home Equity Line of Credit?
A home equity line of credit is different from a second mortgage, instead of getting one big lump sum payment like you would with a second mortgage you’ll get a line of credit instead. You’ll have a special checkbook or credit card to draw on your home’s equity. You’ll still want to keep careful track of everything, just like you did with your checking account or credit cards. It can be easy to lose track so make sure you make the effort!
How Much Equity do You Have?
But before you choose between these two forms of equity loans, you’re going to need to figure out how much equity you have in your home. Start by looking at the latest appraised value of your home. From here, you’ll need to subtract any liens or mortgages you have against the property – after that you’ll know how much equity you have. But the fun doesn’t stop here!
You can only borrow up to 80% of your available equity, but no one ever wants to borrow this much of their equity! You’ll need to be very careful of borrowing against your home – you never know when you’re getting the wrong end of the stick.
So, Which One is Right for You?
Figuring out which one is the right one for you can be difficult – and that’s why you should work with us! When you work with us, you’ll work with some of the best Toronto mortgage brokers around. We’ll help you figure out how much equity you have, how much you can borrow, and if now is the right time to borrow. After all, it takes years to get as much equity as you have, you need all the facts to make the best decision for you.
Visit our second mortgage page today, to learn more about how we can help you: http://www.homebasemortgages.ca/second-mortgage/