Veronica Bowling Real Estate - Royal LePage

How to use the equity in your home as a down payment to purchase an investment property and why NOW is a great time to invest. (Check out the calculation below).

Did you know you can borrow up to 80% of your home’s value to purchase a second property? With a hot seller’s market currently in full swing and home values skyrocketing, now’s a great time to maximize your borrowing potential. Here’s how it’s done:

🏡Clean up your debt servicing ratio. A debt servicing ratio is a person’s ability to repay their debt. It is compared by looking at income to debt-related obligations. So you’ll want to lower amounts owing on credit cards and loans.
🏡Get pre-qualified to learn how much you can afford. I’ll introduce you to the right lenders who understand investment mortgages.
🏡I help you find an investment property or vacation home.

Equity Takeout Scenario: Let’s say your home is worth $900,000.00 with $500,000 remaining on your mortgage. 80% of the value of your home is $720,000.00. From that amount you’d subtract your remaining mortgage amount of $500,000.00 and whatever your mortgage penalty is ($10K for our example). You’re now left with $210,000.00

If you’re looking to purchase a property to rent out, lenders can utilize 50% or the rental income to help with your debt servicing ratio. For most people the challenge is debt servicing ratio so this is where a consignor is a great person to partner with.

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www.veronicabowling.com