Have you ever heard the phrase “unlock the equity in your home?”. Using a home equity line of credit, you can borrow at low-interest against the built-up equity in your home.
Once you’ve secured a HELOC, you can use it as you need: fund a renovation, pay for a vacation, purchase a car, use it as an investment… the options are endless!
Obtaining a home equity line of credit depends on several factors: how much equity you have in your home, your financial situation, and your credit rating. We will determine how much equity you can access, and what interest rate you can expect. Interest rates are typically less than ⅓ of a typical credit card.
A mortgage renewal is the ideal time to refinance your home, but you can do it anytime. We’ll run you through what to expect, any costs (generally, only when refinancing before your mortgage is due for renewal), and other important aspects of obtaining a HELOC.
This first step will nail down initial expectations and provide you with valuable information about how to best proceed. We’ll look at your current mortgage, determine any early-termination fees (if relevant), and provide our expert guidance on the appropriate next steps.
It all starts with a call: get in touch!
You will need to re-qualify when refinancing your home. We’ll collect proof of income (usually we’ll only need a job letter and your most recent pay stub) and connect you with the best lender suited to your needs.
The lender will likely arrange for an appraisal of your home to verify its value.
Once the refinance is approved, you will connect with a lawyer (either one that works on behalf of the lender, or one of your choosing) to finalize remaining paperwork. The lawyer will ensure the current lender is paid, all conditions (if applicable) are satisfied, and that the new lender is added to title.
Once the refinance is complete, several things may happen (depending on the actions we chose):
Simply put, a HELOC is a credit line secured against the equity in your home. There are significant benefits that a HELOC provides for both the borrower and the lender.
For the borrower:
For the lender:
The maximum amount you can refinance is up to 80% of the value of your home. So, if your home is worth $100,000 and you owe $90,000, you won’t be able to obtain a HELOC. However, if you only owe $50,000, you will be able to qualify for a HELOC of up to $30,000 (totalling $80,000, or 80% of the value of the home).
The only fees tied to refinancing come from early termination penalties tied to your prior mortgage and the legal costs to register the new mortgage/HELOC. If you refinance at the time of renewal, there are little (if any) fees associated with the HELOC.