Unlocking the equity in your home
Equity is the differnce between what your property is worth and what you owe. A home equity loan allows you to unlock those funds to use for other purposes.
You might consider using the money for investment, consolidation of debts, construction or renovation expenses and even paying for things like a new car or wedding.
An equity home loan gives you a line of credit on your mortgage up to an approved amount. The loan can be taken in full or in stages, making it particularly useful for renovating or investing.
How much you can borrow depends on your situation – your existing borrowings, income and assets are taken into account. And if the equity is for an investment property, your new and current property values will be assessed.
Be careful though. These loans are very convienient and you might be be greatly extending the life of your home loan by adding these expenses. If the equity is used too much for personal and unimportant expenses, this is where the line of credit or equity loan becomes more expensive.
