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There can be a lot of confusion about home equity loans, its benefits and why one should consider it. A home equity loan is simply a type of loan that allows a borrower to use the equity of their home as collateral.

There are some Good Reasons for a Home Equity Loan

It comes down to responsible borrowing but for those in a serious pinch, this type of loan makes a lot of sense. In certain cases, and used properly and strategically, it can even provide a return.

This is a Great way to Tackle Home Improvement Projects

A home equity loan to improve your home is smart if you’ve done your homework and the renovations improve or fix an aspect of your home. Renovations can be pricy and most cannot go out of pocket for them. This is one of the main reasons that this type of loan exists and is worth considering.

If your home has increased in value, then you’ll have even more equity to borrow against in the future.

A Home Equity Loan can give you a Pool of Cash for Investing

Investing is an acceptable but less popular reason to apply for a home equity loan. You can borrow against the equity of your home at a low rate and then use that money to invest. Obviously, this is only recommended for those with experience, knowledge and a proven track record.

Paying for an Education

Many people struggle to pay for their education or for their children’s education. Even in Canada, where it is subsidized, it can be daunting. A home equity loan can help ease that burden, and while there are risks associated, it can pay off in the long term.

A Medical Emergency could Require a Quick Cash Infusion

As opposed to other loans and line of credits, a home equity loan to deal with a medical emergency is justified. It is also a much better idea to apply for this kind of loan than putting these types of expenses on a credit card.

And that brings us to Credit Card and its Debt

Borrowing against the equity of your home to pay off credit cards is never advisable. It is not considered a cure for consumer debt, especially considering that credit card debt is unsecured.

There are a lot of strong reasons to borrow against the equity built up in your home, and the best advice is to speak with the trusted professional.

Toronto is a North American metropolis that has started to get its due with the likes of New York, Chicago and Paris in the last decade or so. It’s a been a slow ascend to global recognition and the current housing market is a glimpse into the value of Toronto both for businesses and residents.

What Defines a Housing Bubble?

A housing bubble is usually defined by a noticeable uptick in housing prices based on demand but fueled by speculation. The bubble grows as demand increases but as the demand is met by supply the bubble has the potential to burst. Much of this is artificial. The demand was never real and more of a miscalculation by buyers.

Why Toronto’s Market isn’t a Bubble

The bubble that so many people and pundits have warned against is probably just Toronto catching up to other major cities. The speed and craziness of it all makes it feel dangerously like a bubble, but it’s on par with what other major cities have experienced.

As Canada’s foremost job creator, Toronto constantly attracts newcomers from all over the world. Every year new industries and companies open or expand in Toronto and this brings waves of people. People need a place to live which fuels the housing market. It’s hard to fathom this changing any time soon.

Toronto’s Real Estate Market is a Great Investment

There are few safe investments in the world. Most markets and industries are mired with variables that can drop or drive value. That’s the reality that investors face. The Toronto real estate market offers a safer bet since it has provided relative returns year over year for a while now. Even the condo market has defied expectations and grown with more growth predicted on the horizon.

The term “bubble” gets thrown around a lot and if one honestly looks at Toronto Real Estate and how the city is expanding, it feels like a genuine investment opportunity. There might be dips here and there but it doesn’t have the signs of bursting.

Renovating a house or office is a pain. There’s no way around it. The space becomes a construction site, there’s a constant stream of workers entering and exiting and you will most likely experience at least one if not several delays.

In the long run, there’s a lot of benefit to undergoing a renovations project even if the short-term pain is significant.

Renovations can add a ton of Value to your Property

Just about any upgrade to your house can immediately increase its overall value, especially if it’s more than cosmetic. New appliances, floor or carpet refreshes or a room renovation that modernizes or makes it more functional are all investments that should provide a return when you sell.

Some Renovations are better than Others

If you want to feel the value that renovations can make to your home than focus on the kitchen. This is the room that can have the largest impact. Before demolition, do your research to find out which kitchen trends are popular.

Small Touches Can Transform a Space

Most people focus on the large overhauls for houses and offices but sometimes the lighter touches can be the most dramatic. Something as small as under cabinet lightning can make a big difference to a kitchen. Replacing laminate flooring with hardwood can completely change the atmosphere of a room. Get creative and consider millwork and finishes as much as the bigger items.

Focus on Modernity but There’s a Caveat…

The question to ask yourself when renovating is does this reflect modern tastes and sensibilities. Even if something is meant to be kitsch or retro it can still reflect what is on trend. While renovations today might look dated in 10 years, you should consider when you might sell and speak to contractors about how easy future updates might be.

Renovating takes a savvy mind and a lot of patience. If you can withstand the psychological trauma that might come with the experience, you could be find your pockets lined with a healthy return on your investment.

As a family grows so does their need for more space or different neighbourhood amenities. This could mean an extra bedroom or bathroom or maybe it’s important to be within walking distance to a high school instead of a daycare. Life changes and where you live has to fit your lifestyle or even enhance it.

For most families, there will come a time when they must ask themselves if they need to upgrade their home or move to a new one.

Some Reasons that a Family Might need to Move

The most common reason that a family usually considers moving is because they need more space to accommodate a new addition. If you live in a condo, it’s almost impossible to build another bedroom or nursery which means calling the movers and packing up for a bigger place.

Another reason might be that your current home has increased in value and you want to cash in to make a profit. Not only is this a good idea, it can even facilitate an upgrade rather nicely.

Sometimes Upgrading Doesn’t mean Moving

If your family is comfortable and you’re not expecting any new members, then moving might not be the answer. Your home might just need a reconfiguration to be more hospitable.

This can come in the form of a drastic renovation like a kitchen or bathroom remodel or maybe it means a fresh coat of paint and some new appliances. These can make your home feel new and even add value if you plan on selling down the road.

Upgrading can be Mandatory

Maybe you’re expecting another child or plan to care for an elderly relative. Maybe you need to make your home more accessible or are considering listing it on Airbnb for supplemental income. Whatever life hands you or whatever risk you must take, upgrading your home could become a reality. It’s a potential blessing in disguise, though, as your home could become more livable, usable and even more valuable.

The best advice is to always speak with a trusted professional and to consider a home equity loan to finance the upgrades without going broke.