4 Ways You Can Use A Residential Mortgage to Access Your Equityadmin
4 Ways You Can Use A Residential Mortgage to Access Your Equity
The Net Worth of most of Canadians is employed in their properties. Their Home constitutes a huge share in it. In case of financial emergency or educational requirements, one can have access to their home equity without having to move or sell the property. There are many ways to do so, but we have focused on 5 most common and highly recommended ways to do so:
Second mortgage is a simple residential mortgage which is taken in spite of already having a first mortgage on going. The second mortgage lender has secondary rights on the property and thus charges a slightly higher rate than the first mortgage. The lump sum received from the second mortgage can be used for anything.
Debt consolidation is a method where you merge all your dues into one payment, and hence lower your interest rates and avoid any late payments. A single rate and a single amount is the goal. A residential mortgage has a strong collateral which makes it bare a low interest rate. This can be used to pay of other high rated dues in case of deficiency.
In this you simply are using your equity to eventually increase the value of your equity. A residential mortgage is taken for the sole purpose of home improvements and expansion, which increases the equity value of the home and gives the lender a relatively lower risk.
Here the home owner increases in debt or decreases his home equity. He simply receives periodical payments or a lump sum together in the beginning instead of paying the premiums. This borrowed loan becomes due when he shifts or sells his property. He can either pay off the loan or simply let go of the tittle. This residential mortgage is available only for senior citizens and usually they let go of the property after their demise.