Services · 03 · Equity take-out
Use the equity you have built, carefully.
Take cash out of your home for a renovation, an investment, a child's down payment or a business need, with a repayment plan attached.
03
What it is
Equity is the difference between what your home is worth and what you owe on it. An equity take-out turns part of it into cash, through a refinance, a home equity line of credit, a second mortgage or, from age 55, a reverse mortgage.
Each route has a different cost and a different risk. The right one depends on how much you need, for how long, and how you will pay it back. That is the conversation we have first.
Who it is for
- Owners planning a renovation or an addition
- Parents helping a child with a down payment
- Investors raising a down payment for a rental property
- Business owners who need working capital
How it works
Value
An estimate of the home's value first, then an appraisal when you proceed.
Choose the route
Refinance, line of credit, second mortgage or reverse mortgage, compared on total cost.
Approval
The lender reviews income, credit and the property.
Funds
Your lawyer registers the new charge and the money is paid to you.
Documents to have ready
A starting list. Your own checklist is built after the first conversation.
- Current mortgage statement
- Property tax bill
- Income documents
- Government photo ID
- A short note on what the funds are for
Common questions
How much equity can I take out?
With a regular lender, the mortgage and any line of credit together can go up to 80% of the appraised value. The revolving line-of-credit portion on its own is limited to 65%.
Do I have to break my mortgage?
Not always. A line of credit or a second mortgage can sit behind your existing mortgage and leave its rate untouched. It costs more per dollar borrowed but avoids the penalty.
Is the interest tax-deductible?
Interest on money borrowed to earn investment or business income may be deductible. That is a tax question: confirm it with your accountant before you rely on it.
What if my income does not qualify?
Alternative and private lenders lend more on the equity and less on income, at a higher cost. See private and alternative lending.
Talk it through with Hamed.
Eight questions, about a minute. Hamed reviews your answers and calls you, usually the same business day.