We have seen more regulatory changes to the mortgage financing industry over the past couple of months and pretty much every year for the past four years. One other change that is in the works is a reduction on the maximum loan to value allowed for Secured Line’s of Credit. Right now a Secured Line of Credit can go up to 80% of a property value. This could be cut to 65%. With generally mortgage refinancing now at 80% (it was 95% four years ago) regulators are trimming back how much equity a borrower can pull out of their properties.
Equity in your property is an asset and if used correctly can be used to greatly increase your net worth. The equity can be used as a down payment on another property, to renovate to increase property value, debt consolidation to lower interest rate and increase cash flow. Remember there is no cost on the Line of Credit unless you actually use it and once used it can be converted into a fixed or variable rate mortgage at any time. So even if you have no immediate need for a Line of Credit you never know what may pop up down the road. It is smart to be prepared.
With property values in GTA at a premium now is an excellent time to tap into that equity before it gets taken away by the regulators.
Give me a call or send me an email if you want more information or would like to add a line of credit to your property