Waterloo: An Ontario
Investment Hub
Real estate experts rate Waterloo as one of the top ten communities in Ontario
to call home. It is one of the technological centres of the country and has
been dubbed the number one investment town in Ontario. The city has made a
commitment to transportation and infrastructure, drawing even more people to
invest in both real estate and local business. For such investments, most
people do not realize they have an important asset at their fingertips that can
help further financial success. Using home equity mortgages, Waterloo
homeowners can continue to invest in their community while enjoying financial
success. Options like a home equity line of credit (HELOC) will empower
homeowners to use what equity they have built to invest for future needs like
retirement.
Understanding Home
Equity
Home equity is easy to comprehend. Equity is the market value of the home,
subtracted by the amount of debt still owing on the home. Homeowners need at
least twenty percent of their equity built before they can borrow against it.
Second mortgages (those that are borrowing against the equity or the "first
mortgage”) can only borrow up to eighty percent of the total equity. This is
the fixed amount a homeowner can qualify for in a HELOC.
A HELOC is not unlike how a credit card works but with a
better interest rate and a flexible repayment schedule. A fixed spending limit
is assigned to a borrower and interest is only paid on the amount taken out of
the loan. This fixed spending comes from the amount of equity in the home.
HELOC
loans are popular choices for homeowners because of the following benefits:
- Predetermined spending limit – helps with
budgeting and prevents accumulating further debt.
- Flexible spending – great for an "as needed”
basis, including reinvesting in property through home renovations or investing
in a small business. The ability to borrow from your home equity at any time for
any investment or project.
- Zero time-based limitations – as long as
homeowners pay the minimum interest payments, borrowers continue in good
standing with a HELOC loan. There are no penalties for paying more against the
principal amount and once the balance is paid off, the loan is still available
to borrow from.
- Lower interest rates – significantly lower than
credit cards, making it easier to pay back and minimize debt.
Managing Debt for
Future Success
HELOCs can also help to
consolidate
debt to prepare you for future financial investments. If you find yourself
playing catch-up with outstanding bills, this type of line of credit offers a
solution for debt management. Using the equity in your home, a HELOC loan can
pay off outstanding debt, leaving you with one monthly payment that is easy to
make at a lower interest rate.
Joining with a fully licenced mortgage professional will
help Waterloo homeowners find the loan that is best for them. Investing in
local Waterloo business can help fund future financial needs like retirement
planning, purchasing recreational property or going on an extended dream
vacation. Whatever your needs, brokers can offer the right advice and provide
the guidance you need for success.