How to Take Advantage of Toronto's Real Estate Bubble and Your Home Equity
How to Take Advantage of Toronto’s Real Estate Bubble and Your Home Equity

Don’t let financial fears or debt keep you from investing in and making improvements to your home

Toronto consistently tops the global list of best cities to live in thanks to its culture, walkability, safety and more. But the luxury of living in this waterfront metropolis can come at a high price, especially for homeowners who might feel chained to a mortgage. At first glance, rising house prices in the Toronto real estate market may seem benign to those not looking to sell. What this actually means is a major opportunity to leverage the equity in their home and access additional funds without sale.

So what does Toronto’s real estate bubble look like right now?

Despite a brief dip in 2021 due to the COVID-19 pandemic, Toronto’s housing market continued to climb, driving GTA home prices higher across the board for renters and buyers. In the last quarter of 2021, the median sale price for single and semi-detached homes in Toronto hit an all-time high of $1.38 million and $1.1 million, according to recent published data by the Canadian Real Estate Association.

The average condo price in Toronto has also increased significantly. Supply and demand, along with low interest rates, are major factors in the seemingly uninterrupted growth of the Toronto housing market crisis. Low inventory and strong demand alongside buyers taking advantage of low interest rates are making the market hot, driving home prices high in the GTA. Unfortunately, there is no end in sight, but all hope is not lost when it comes to home equity.

What exactly is home equity?

It’s a seller’s market, but there are also advantages for owners who don’t want to sell. Consumers can take advantage of what they own by using a home equity loan or home equity line of credit. These types of loans allow you to borrow money against the equity in your home. For example, if you own a $700,000 condo and still owe $400,000, you have $300,000 of equity that will continue to grow as you accumulate on your mortgage. Equity also rises when the housing market is strong, driving up prices, as has been the case recently.

Can I pay off a debt with the equity in my home?

Having access to those extra funds can be life-changing, especially for those who live in a city that makes it difficult to pay off debt (ahem, Toronto). Homeowners can use the equity in their home to their advantage by paying off their debts.

A debt consolidation loan is an effective way to save money while paying off debt. Using a home equity loan, homeowners can consolidate high-interest payments into one low-interest payment with a more plan-friendly term, payment, interest rate, or loan structure. financial. Ultimately, this type of loan can help homeowners take control of their debt. The current housing market also allows homeowners to take out a larger home equity loan.

How can I invest using the equity in my home?

It’s easy to feel bogged down in debt and bills, even when bombarded with encouragement to invest, invest, invest. But there’s something homeowners may not consider, and that’s using the equity in their own home to put it back on the market and invest in your financial future. Owners do not need cash to take advantage of new investment opportunities; rather, they can leverage their equity to provide some flexibility.

Home equity loans can help increase the value of your home

Whether you are looking to sell or want to stay in your home long term, home renovations keep your home up to date and in good shape for whatever comes. Homeowners can take out a home equity loan for improvements, like gutting bathrooms or upgrading outdated kitchens. Renovations are a great way to add value, but many homeowners worry about not qualifying for a home improvement loan.

Harnessing the power of home equity frees up space to invest, pay off debt, and increase the value of any home. Click on here to learn more about debt consolidation and other home equity loan applications with Alpine Credits.

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