Home equity loan basics

When buying real estate, you'll be taking on one of the biggest investments of your life. But your property is likely to also be your biggest asset.

While the brunt of these purchases are usually felt through repayment of home loans and mortgages being paid back across several years, a house is also an investment – an asset which is weighted by a person's valuation.

An equity home loan allows you to get a line of credit on your mortgage for approved amounts. Your equity is simply the difference between your properties overall value and what is left owing on your mortgage.

You may be able to borrow against this amount in order to utilise some of that equity for your own purposes – renovate your property, invest in more real estate or refinance your mortgage among other things.

How much you can borrow against your home loan comes down to your own financial situation. Your income and assets are taken into account as well as any existing borrowed amounts.

Taking out an equity home loan can help you achieve your goals for property investment sooner than saving; but be wary, you need to manage your debts in order to minimise risk and increase your overall return.

If you have any questions or would like some more detailed information on your situation, talk to me today.