If you have owned your home for a number of years, chances are you have built up a considerable amount of equity that you can tap into. This is an appealing prospect for many homeowners due to the record-high equity driven by soaring home prices.
Have you been thinking of expanding your real-estate portfolio or even having the ability to take on that kitchen renovation? Now you can! Millions of Canadians have been using their home equity to do just that and more. There has never been a better time to use the wealth you have built-in real estate to expand and build more wealth.
We’ve broken down the top 3 ways you can build wealth now or for future generations.
1. Pay off High-Interest Debts
Most smart financial planners will tell you that your first step to financial freedom is to pay off high-interest debts. Accumulating debt is easy to do these days, especially with the rising cost of gas, food prices, and inflation. With the cost of living rising steadily, it’s becoming that much harder to stay ahead – especially for hard-working Canadian families. Sometimes all it takes is one missed payment to incur late fees and high-interest charges and penalties. This creates an extremely stressful situation and puts a strain on many creating instant financial hardship.
Debt consolidation refers to the process of reorganizing and refinancing your current debts so they can be lumped into a single monthly payment. Whether you have bad credit, maxed-out credit cards, or other issues, don’t let debt put a damper on your financial standing. Finding your way out of the debt cycle can seem like an impossible feat, but it doesn’t have to be.
Whether or not you have bad credit, maxed-out credit cards, or other credit issues that have put a damper on your financial standing, our debt consolidation experts are available to help across Ontario. Our extensive network and growing resources have helped countless households redefine how they approach their budgets so that they can make the most of their capital.
By applying for a debt consolidation mortgage loan, you will have the tools to manage your debt in one place, rather than juggling multiple lenders. Debt consolidation loan terms are outlined ahead of time and can be managed monthly in a pre-determined payment schedule that works for you. You will have the stability and predictability of regular payments with a long-term strategy put in place, you will be able to see your debt diminishing, your credit score will improve and you will see a significant boost to your overall financial health.
If you are struggling to manage various debts from multiple sources or having issues with your financial institution, start making those small steps towards a great financial future.
2. Purchase a Second Property
Have you always wished that you could buy an investment property or even a vacation home or cottage? With home prices at record highs, many Canadians are using this opportunity to tap into their home equity to purchase a second property. In fact, owning a second home has been on an upwards trend for a number of years now – in fact, more than 10% of Canadians own more than one home. It’s a dream that can be made a reality thanks to your current home equity.
By applying for a Home Equity Loan, A Home Equity Line of Credit (HELOC), or a Second Mortgage, you can secure the money you need through a mortgage broker and the funds can be paid back at relatively low-interest rates when compared to other borrowing options.
Some of the top reasons people choose to purchase a second property are:
- Income Potential – Is your second home in a popular vacation spot? If so, you may be able to use your home to generate income through renting it when you’re not using it.
- Long-Term Profits – According to a recent Royal LePage survey, the average price for a home in Canada increased 17.1% year-over-year in the 4th quarter of 2021, hitting $779,000.
- Another Lifestyle – What is your reason for purchasing a second property? Is it to spend more time with family or grandchildren? Is the second home near a desirable leisure activity? Will it be a future retirement home? Sometimes that purchase could be for lifestyle reasons first and financial reasons as a secondary consideration.
- Build On Your Investments – If you are hesitant to get into the stock market or find that other investment options are unreliable or even risky, it’s a good idea to concentrate on building wealth through real estate instead
For more information on things to consider when purchasing a second property, visit our recent blog to see if this is the right move for you.
3. Tackle That Renovation
Making improvements to your home can significantly enhance its value. In fact, most remodeling projects will generate a rate of return anywhere between 70-90%. Home renovations have many advantages beyond just enhancing the appearance. Any home improvement project can improve the functionality of your home, enhance your property value if you wish to sell, lower your energy costs so you can save money, increase space or upgrade the design or style of your home to suit the current market.
In short, home renovations can greatly improve your quality of life. Some of the most popular renovation projects in terms of ROI are:
- Turning an attic into a bedroom
- Bathroom renovation
- Master suite addition
- Home office remodel
- Sunroom addition
- Adding a new fireplace
- Kitchen remodel
- Garage door upgrade
- New front door
- Window replacement
- Backyard deck
If you want to start building wealth using any of these 3 suggestions, call us today to get started. Our expert team can guide you on the right path now and for your future. Your brighter financial future starts today.