Equity Takeout Mississauga, ON
Equity takes out is a fancy way to say increase your mortgage. Most people have been taught to pay down the mortgage. It is almost like an instinct that we have to pay down the mortgage. Most banks have learned to play this game. They want us to feel good, so they don’t use any terms that would resemble the word mortgage. There are terms like HELOC, secured line of credit, Home Equity Loan, Home Improvement loan, etc. However, these are all mortgages in disguise.
As long as they put a lien on your property, it is a mortgage.
We are living in a world that has a constant need for money. I remember most the older folks I used to know were always complaining things are too expensive, prices keep going up. Everything seems to cost a lot more. The city taxes keep rising, the utility bills keep going up. Now, I catch myself with similar complaints at times.
We forget there are always two sides to the story. Yes, the taxes have gone up, the price of bread has gone up. However, most people’s income has gone up as well. Forty years ago, the minimum wage was $1.15 an hour. Today, you will be lucky to find someone willing to work for less than $15 an hour. This is the result of inflation.
As we just said there are two sides to the story. The good side of inflation is that most homeowners have built up lots of equity in their houses. One may have purchased a house 25 years ago for $200,000. If you are living in the GTA, the house may be worth over a million dollars. In theory, after 25 years, the mortgage should be paid. In other words, you may have $1,000,000 in equity. O.K. I get this, you still have a $300,000 because you have done some debt consolidations along the way. If this is the case, you still have $700,000 equity.
This equity is as good as money in the Bank. In other words, your house is your ATM machine. If you need money, you can draw from it.
- Home equity loan
- This can be a new first mortgage or a new 2nd mortgage
- Home equity line of Credit (HELOC)
- This can also be a new mortgage or a new 2nd mortgage
- Reverse Mortgage
- If you want no monthly payment for life.
There are many reasons for equity take-out:
- Education funds
- Down Payment for adult children’s house purchase
- Home Renovations
- Retirement Planning
- To fund “The Bank of Mom and Dad.”