One of the primary reasons that people consider refinancing their current mortgage<\/a> is to tap into the power of the home\u2019s equity. While this is the right choice for many people, it is always a process you should study carefully before initiating next steps.<\/p>\n The value of your home minus the balance of the mortgage is your home’s equity. You may be eligible to access your home equity,\u00a0withdraw it, and invest it in several different ways, including post-secondary education, home renovations, additional real estate<\/a> and more.<\/p>\n Increasing the value of your mortgage by refinancing can enable you to access up to 80% of the home’s equity. In addition to a mortgage refinance, there are two other options you may wish to consider, known as the second mortgage and a home equity line of credit.<\/p>\n A second mortgage enables you to receive up to 80% of the loan to value ratio and these often come with a much higher interest rate. Bear in mind that this is one of the reasons why these are less popular as well as the fact the not all lenders<\/a> will offer them.<\/p>\n A home equity line of credit does not lead to the funds advanced up front. You withdraw the funds as you wish and only pay interest on the amount that you take out and therefore not subject to a refinance penalty.<\/p>\nHow to Calculate Equity<\/h2>\n
Different Ways to Access Home Equity<\/h2>\n
Second Mortgage<\/h3>\n
Home Equity Line of Credit<\/h3>\n