Page 20 - Real Estate Now Sept-Oct 2022

HELOCs vs. Home Equity Loans vs.

Remortgaging: Tapping Into Your

Home’s Equity

Michelle McNally courtesy REALTOR.ca
H omeownership has many benefits, including the ability to use your property’s equity as a lending resource.

Whether you need funding for a renovation or to consolidate debts, a mortgage holder can access home
loans and home equity lines of credit (HELOC) through their property. There’s also the option to remortgage
your home, which by breaking your existing mortgage and starting a new one, can provide leftover cash through
your home’s equity to pay for large expenses.

If you’re considering employing your home’s equity, here’s what you need to know about HELOCS, home equity loans,
and remortgaging.

What is a Home Equity Line of Credit (HELOC)?

If you’d like the flexibility of having a large chunk of change on standby, a HELOC may be an option for you.
A HELOC is a facility on your mortgage that lets you take out cash from your home’s equity as you need it. HELOCs are
a type of revolving credit, meaning you can borrow money, pay it back, and borrow the funds again. You can use as
much or as little of the HELOC as you want.
In a survey conducted by BNN Bloomberg and RATESDOTCA, 27% of those surveyed said they had a HELOC, and 78%
of those respondents stated they had used it. Most participants said they borrowed less than $50,000 on their HELOC.
There are many reasons why someone might make use of their HELOC. According to Elan Weintraub, a mortgage
broker and co-founder of Mortgage Outlet, they can be for big expenses such as paying for a vacation or a renovation,
consolidating other loans, or for investment purposes. Weintraub has also seen some parents pull money out of their
HELOC to help fund their adult child’s wedding or down payment.

20 | REAL ESTATE NOW | LB@LoraleeBurns.com