What's a re-advanceable mortgage? Typically, homeowners get a mortgage on their home or investment property and should they need to access their home equity for investment or personal reasons, they would have to break the mortgage, pay a penalty and legal fees to refinance their mortgage. A great way to continuously access their equity, homeowners can get a re-advanceable mortgage.

The homeowner will need to have 20% equity in their home. Based on qualifications, a mortgage up to 80% of the appraised value can be obtained and split into a fixed or variable mortgage with a line of credit. As the homeowner pays down the mortgage principal, the line of credit increases by the principal amount for a total of 80%. This product can be obtained on primary residence and one rental property.

Example

Home value: $400,000

80% mortgage: $320,000

Mortgage portion: $300,000, line of credit portion: $20,000

As the mortgage principal is reduced, eg. $319,500, the line of credit increases to $20,500. Another benefit of this product is the homeowner does not pay interest on the line of credit until funds are borrowed which allows the homeower to aggressively paydown their mortgage knowing that all the available principal would be accessed via the line of credit.

For your personalized mortgage review, please contact me.