Equity Mortgage and Secured Lines of Credit

To achieve the best interest rates on an Equity Mortgage, you will want to leave a minimum of 20% equity in your home. This is a great mortgage for someone who may have purchased a home at a lower purchase price than what the home is worth in todays real estate market and they would like to take some of the equity out of their house in the form of a mortgage. The money could be used for home renovation, debt consolidation, to take a trip or simply to just have extra cash.

By leaving 20% equity in your home if you should decide to refinance or take an equity mortgage, your mortgage would be classified as a conventional mortgage and you will not be charged any insurer premiums.

Western Canada Mortgage can arrange traditional fixed rate mortgage financing, variable rate mortgage financing or even arrange for you to have a split mortgage, if you would prefer. A split mortgage is where you have a mortgage that has numerous different mortgage terms maturing at different times, with different mortgage rates. This can include a secured line of credit that requires an interest only payment, fixed terms mortgages, or variable rate mortgages. You can have up to 9 mortgage products registered against the one house under the split mortgage program.

For an example on how the split mortgage works, lets say you were going to get some money in a year. You could take a 1 year term for the amount of money you are expecting, and a 5 yr term for the balance of the money. When you get your money in a year, you would then be able to pay out the 1 yr term and not have any penalties, while the 5 yr term continues.

Another option is a HELOC, home equity line of credit. The advantage to having a home equity line of credit in place is that you have re advanceable money readily available to you, yet you are not paying any interest or payments on the home equity line of credit until you have used it and have a remaining balance.