Can I use the equity in my existing home to help with expenses during the process of building a new home?
A home equity loan can be used for virtually anything, including helping cover costs while you prepare to move into a new home. Using the equity in your existing home, you can secure a down payment, cover costs of improvements to prepare your current house for resale or cover costs involved in planning and preparing for a new build.
Home equity loans, especially those secured through non-bank lending services, can range in length and terms and can be fairly flexible. For example, if you are planning to sell your existing home once your new home is ready, you could secure a home equity loan with a zero payment term and use those funds to cover extra expenses so that you don’t have to list the home until your new home is ready to move in – and then pay the
principal with interest once the home has been sold.
Sit down with your lending professional to go over your assets, financial needs during the building process, your long term goals and to determine what terms are the most suitable for you. – Amit Anand, www.tribecca.ca