As you pay off your loan for your home, the quantity you own increases accordingly. This is referred to as equity. It is the difference between the remaining loan on your house and the appraised value or current value of the house. For example, If the house is valued at $400,000 and the remaining loan is $200,000, this results in a $200,000 in equity.
You can unlock this equity for many reasons such as to buy property, buy shares, purchase vehicle, pay for tuition, or for holiday purposes or consolidate debts.
Many Lenders offer home loan, referred to as Home Equity Line of Credit (HELOC). A HELOC is a Line of Credit secured by real property. How much you can borrow depends on how much equity you have, your personal circumstances and the lenders criteria. A Centum Mortgage Specialist can help you calculate the equity in your home and choose the right loan and lender for your individual circumstances. Because your home is likely to be your biggest asset, unlocking your equity can be a great way increasing your wealth. Home equity loans are popular with property investors, as you can purchase other properties without a deposit. In certain cases, you may be able to obtain more than the full purchase price to cover other fees.
A Typical HELOC has monthly payments of interest only based on a variable rate. The borrower can make payments as small as the interest only or as large as he or she wishes. This plan allows the borrower to borrow funds as necessary and make repayments that fit his or her budget.