Looking to Buy Home for Sale in Toronto with Equity in Home

Lots of people want to buy a home in this city, but not everyone looking to buy home for sale in Toronto has equity in a home already. Those that do are very fortunate, as this can take much of the hassle out of the home-buying process, and can be a huge help with things such as the down payment.

When you already have existing equity in a home, you can borrow against that equity in order to purchase another home. This can be done using a second mortgage such as a home equity loan. These are much like first mortgages wherein you’ll receive a lump sum after the application and approval process; and you can then use this lump sum as a down payment on a second property. Whether you’re using that second property as an income property, a vacation property, or any other type of residential home is up to you. But with a second mortgage, it’s all possible.

So how much can you borrow when you’re looking to buy a home for sale in Toronto with equity in a home already? Typically lenders will loan up to 80 per cent of the total equity in the home; and the equity is the total value of the home minus the balance remaining on the original mortgage. If you have enough equity in the home, it could be enough to cover the entire down payment of the second home.

This can be a great strategy for anyone that’s looking to buy a home for sale in Toronto, but it’s an especially lucrative strategy for real estate investors. Those looking to buy an investment property have to pay very little out-of-pocket expenses when doing so. In a short amount of time, the mortgage payments on that second property can be paid with the rental income on the home, and maybe even with a little bit left over. It can also be good for other investors who like to flip homes. The home can be purchased using the equity in the first property, and then fixed up and repaired quickly to sell for a profit. With that profit the home equity loan taken out on the first property can be paid off, again most likely with a little extra left over.

There are many opportunities for buying a home in Toronto. But when you’re looking to buy a home for sale in Toronto with equity in a home, you have more opportunities than many other buyers on the market.