Most homeowners who have put a mortgage on their place have some home equity. This can be used for a number of things, like investing in order to get a higher return, using it for a student loan or as a retirement income. However, the most common way to use a home equity is to renovate your home.
Home equity represents the difference between the amount you owe on the loan and what the bank values your house. The good news about it is that it never stays the same, so it can build up over time as your home’s value increases, or you can increase it by reducing your loan balance.
Using Home Equity to Renovate Brings More Value Into the House
When it comes to using home equity to renovate your house, this could work well for you for several reasons. Chiefly, you are using the home’s own value here to borrow money and put more value back into the home. Thus, you not only create extra value through home improvements, but also create more equity this way.
With today’s real estate prices as high as they are, many homeowners are reluctant to sell, but rather decide to use a home equity to renovate. If that’s the decision they’ve made, a homeowner has several ways to get home equity, including getting a second mortgage, a line of credit or refinancing their home mortgage.
Of course, when using home equity to renovate or remodel your home, there are a few things you need to consider, such as the estimated return on investment you are making, any tax benefits you would get or how long the project will take. The big question, however, is how long do you intend to stay in the home you are renovating.
Whatever the reason you are renovating your house and whether you are doing it in order to sell for a higher value or you intend to stay there , know that using home equity can be a great boost for your project.
Watch this episode with Realtor Joe Terceira and mortgage broker Tracey Brock to learn more about why and how you can use home equity to renovate your home.
For more information on home renovations, contact:
Looking to Buy Or Sell Real Estate In The GTA?
Joe Terceira / Sales Representative
THE JOE TERCEIRA TEAM
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