Use your Equity to increase Value
Many people set out to make their home an investment. When they buy their home, they work very hard to make sure they are getting it for the lowest price they can, and to get the highest price possible when they sell. But much can be done in between those transactions to increase the value of your home.
We’ve seen tremendous price appreciation in the lower mainland, and many homeowners now have significantly more equity in their homes. This presents an excellent opportunity to use that equity to increase the value of your home, and reduce some of the monthly costs. Many people who spend out of pocket money on home improvements could arrange for a small equity mortgage to access those funds at some of the lowest interest rates available in decades. You can access equity without any hidden fees or penalties through several available options; by taking out a small second mortgage, line of credit, or extending a first mortgage. Homeowners can borrower money against their home to make renovations, increase the value of their home, and reduce their monthly heating costs!
When the value added to your home is greater than the amount of interest paid on the money to make those improvements, you are guaranteed to make money on the renovation.
For Example:
- A home is purchased for $250,000 with $25,000 down and a mortgage of $225,000.
- The home is now worth $300,000, and the current mortgage is $210,000.
- There is currently $90,000 available equity in the property.
We can borrower $30,000 from that equity for home improvements by way of a second mortgage without paying any CMHC insurance fees or penalties. The interest payments for one year on $30,000 can be as low as $780 for the entire year! *
$30,000 can contribute new windows, a new high efficiency furnace, and a new heat pump that will also deliver air conditioning (price based on an average two storey home **). Instant results include improved living conditions, improved curb appeal, and increased value!
This is an excellent opportunity for homeowners to use their equity responsibly by re-investing the gains back into their home, and increasing the value of the most important investment they will ever make!
Contact BJ Block at 604-916-0390, bj@mortgagebrokerteam.ca