Borrowing strategies with your home & mortgage for improved cash flow

To help you become a better borrower, it's a good idea to start by developing a borrowing strategy. Speak with your personal banker who will help you to create one that's perfectly suited to your personal goals.

Similar to an investment strategy, a borrowing strategy will help you to become financially better off. It will put you in control of your finances, help you to address your immediate and longer-term needs, and improve your cash flow.

Here are three examples of borrowing strategies that you may want to take advantage of:

1. Choose the right mortgage - it's as important as choosing the right home.

Choose the right mortgage solution based upon your goals and level of (interest rate) risk tolerance. Should you opt for a variable rate or fixed rate? Choose a longer term, or a shorter term? Ensure that you're comfortable with the mortgage solution you choose based on your present financial circumstances, and regardless of which direction you believe interest rates may be headed.

2. Use the equity in your home to help you borrow at lower rates.

Borrowing at secured rates usually costs less and oftentimes creates additional flexibility with cash flow. If you have equity in your home, you've got leverage you can use to gain greater control over your finances.

Try laddering your mortgage to leverage the equity in your home to borrow at lower rates. By staggering mortgage renewal dates, you can limit your exposure to interest rate risk. Plus, by using multiple terms and amortization periods, you can minimize your interest costs and pay off your mortgage balance faster. By laddering your mortgage, you can find the right mix of mortgage solutions to suit your individual needs and risk tolerance.

3. Determine the right borrowing solution for renovations - large or small.

In addition to the right mortgage, any money you spend on renovations oftentimes will add more value to your home - an investment in something you own.

Finding the money for your home renovations begins with figuring out how much money you may need for your project and when you will need it. Once you have decided how much you will need to spend, gear your financial options to the level of renovations you plan to undertake. For smaller to medium scale projects, you may want to consider using a credit card or line of credit. For larger projects, you may want to consider refinancing your mortgage to pay for your renovation needs.

Scotiabank wants to help Canadians find the money and become financially better off by finding relevant, practical and insightful solutions to meet their needs for borrowing, saving and investing. For more tools, tips and advice on how to find the money, visit findthemoney.

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