The equity in your home is essentially the difference between what your house is worth and what you currently owe on your mortgage balance. Since property values tend to increase over time, most people who have been in their home for an extended period of time may have a substantial amount of equity accumulated. By using a mortgage broker or agent from RMA, you can take the necessary steps to refinance your mortgage up to 95% of value of your home. The equity you have built up would then be distributed to you and can be applied to the home renovation projects you are interested in.
The main difference between obtaining a new loan to cover renovation financing and working with a mortgage broker at Real Mortgage Associates to apply for mortgage refinancing is that you are essentially accessing your own money through a new mortgage. Unsecured loans to acquire renovation financing often also carry much higher interest rates and much shorter loan terms that traditional mortgages which means much higher monthly payments. Depending on how much equity you have built up, refinancing your mortgage and extending the terms of your loan may also lower your overall interest rate to be competitive with the current market rates as well as potentially lower your monthly payment.
While some people are still uncomfortable accessing the equity in their homes, they should understand that a major home renovation can not only increase the value of your home significantly but the added value is sometimes enough to regain any equity you may have given up during the refinancing process. Refinancing your home to access equity is also a more viable financial solution for most people than obtaining a separate loan to renovate since separate loans may add several hundred dollars to your monthly expenses. Refinancing your home to access your equity however, may only add a hundred dollars or so. Most home refinancing extends the mortgage itself and lowers your monthly mortgage payments even after the equity has been accessed and used for home renovation. By contacting a reputable mortgage broker such at Real Mortgage Associates, you will be able to speak with a professional in more detail regarding all your home renovation financing and mortgage options.