Home equity refers to the different between the current market value of your home and your current mortgage balance. For example, if your home has a current market value of 400,000 and your current mortgage balance is 250,000, you have 150,000 in home equity. The equity available in your home continues to grow as you pay down your mortgage and as market value rise. This equity can be used as collateral to access cash for a wide variety of reasons as we discussed in this article earlier.
There are two main options to access the equity you have built in your home: refinance your mortgage or secure a home equity loan through a third party company like Tribecca. A home equity loan is a loan that is secured against the equity in your home and is separate from your mortgage. There are a number of reasons why a home equity loan may be a better option then refinancing your mortgage.
Avoid Prepayment Penalties: Most mortgages have a prepayment fee if your remortgage before the end of your term. For many homeowners, it makes more sense to access the equity in their home through a home equity loan to avoid those fees. A home equity loan could then be included in the mortgage when the term renewal comes up, allowing you to access the cash now and add it into your mortgage payment later, avoiding penalties and extra fees.
Avoid Bank Restrictions: As of January 1, 2018 the banks have to qualify their customers under the new mortgages rules, which will make it more difficult to get approved at the bank. At Tribecca Finance, we do not have the same restrictions. If you have sufficient equity in your property and are able to make the monthly loan payment, you will get approved for a home equity loan.
Access Equity Faster: Refinancing your mortgage can be a lengthy and time consuming process which, especially in emergency situations, you may not have time for. With a home equity loan from Tribecca, you get approval within 24 hours and cash in hand as early as 5 days later.
Customizable: A home equity loan offers a much greater variety of payment options, term options, etc. The loan can be tailored to meet your needs specifically. You can even choose a no payment option where there are no monthly payments and the interested is paid when the loan is paid off. This is a great option for homeowners who need to access the equity now but will have the funds to repay the loan in full in the foreseeable future.
If you’re looking to access the equity in your home, the experts at Tribecca Finance can help! To get started, simply Apply Online or call them at (416) 225-6900 and one of their lending specialists will be pleased to assist you.
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