LeahCoss.ca Hi everyone, how are you? It’s Leah Coss with The Mortgage Centre. I wanted to talk about equity programs. Now, what is an equity program? Well, much like new immigrant programs, self employed stated income programs, equity programs is another product that some banks, not all banks, offer. So what an equity program is and why it’s somewhat beneficial to get into one is it alleviates a lot of paperwork hassles. So especially if you make income in a complicated fashion, maybe you are a contractor who just gets contract jobs, maybe you’re a singer songwriter and you just get money where you can or maybe you’re self employed and you don’t declare a lot of income. Equity programs, essentially what they are, is they loan to you based on the equity that you have in the home. Now, why would a lender create this program? Well, like with anything, if you give me something your only thought in your mind is, what is the risk of you not giving that back to me? What are the chances? And one of the ways that banks evaluate their chance is by how much skin you have in the game. So, for example, who’s probably going to be more likely to default on their loan, someone with only five percent of equity, or skin in the game in that house, or someone with 50 percent or even 35 percent. Well, chances are the people who have 35 percent or 50 percent of their money, of the percentage of the value of that home, that’s their money of 35 percent in there, they’re not going to default on …
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