One thing we can count on in the mortgage industry is change. In learning how to optimize the market to your advantage, it may be wise to get a line of credit today to protect you from having to sell your house before you’re ready. Canada’s banking regulator has stepped in with changes that may take some of the edge off the central bank’s worries about household debt. The Office of the Superintendent of Financial Institutions (OSFI) plans to cut the amount of debt available through home equity lines of credit (HELCOs). The current limit of 80% of value will be chopped to 65%.
The following three points outline why it may be important to apply for a secured home equity line of credit today:
1. Changes are coming for secured lines of credit that will reduce consumers’ qualifications by 30%. Much like we have for insured mortgages where people have to qualify at much higher rates, the last thing you want is not to be able to access your own home equity if you have worked diligently to pay off your mortgage.
2. You deserve to not overpay to access your equity and be forced to downsize (while the reverse mortgage option is viable for some, it’s not always the best solution).
3. People are living longer and are being forced back into the workplace longer. Not everyone can count on the pensions or stock equity we may have had at one point. It’s time to get your asset working for you. Don’t forget that if equity is used for an income-generating investment, you can also take advantage of the tax benefit for the interest paid.
Setting yourself up for success is usually the result of what you know. With these upcoming changes, this little bit of knowledge can go a long way when your planning matters most. I will offer unbiased help and assist you in putting together the best plan to use your equity to your advantage!
Angela Calla, AMP
Dominion Lending Centres-Angela Calla
Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980
Phone: 604-802-3983 Email: callateam@dominionlending.ca