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An equity take-out mortgage is a type of loan used to leverage equity for another purpose.  The loan, or in many cases refinancing mortgage, may be used for renovations of a property, to use as a down payment for a purchase of another property, for investments, debt consolidation, or any other desired purposes. Because equity loans are tied to an existing owned property, the property owner must first have equity available in property.  This means subtracting any existing mortgages or liens from the properties fair market value.  An equity take-out mortgage can take the form of a fixed rate and fixed sum or can be a variable rate and be arranged as a line of credit.

Benefits of Equity Take Out Mortgages

Typically, an individual greatest portion of net worth comes from their home. If they have owned a home (or other property) for a long time it is likely the property has appreciated in value and they have accumulated a decent amount of equity during that time.  If a homeowner then requires money for another purpose, an equity take out mortgage (or alternatively mortgage refinancing) will often make the best financial choice versus other types of loans because loans secured by real estate are normally able to secure better interest rates and terms than loans secured by other means or not secured at all.

At Dominion Lending Centres, we have a variety of equity take out mortgages available. If you have sizable equity in a property and are considering borrowing against it, we can help you in choosing the most appropriate equity take out solution to meet your goals.

It is important to remember, while taking out equity from your home can be a useful tool and good idea, you should always do so with caution and make sure you understand the benefits and associated risks. The best option is to consult a mortgage professional and financial planner to discuss the best opportunities and products available to help you make the most of your available home equity.

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