Welcome to another inspiring episode of The ADU Show! Host Noura Bishay sits down with Harry Ho, the bank manager of BMO Westminster, to unravel the world of home financing and show homeowners how they can use the value they’ve built in their homes to fund their dreams. If you’ve been thinking about starting an ADU project or just want to make your home work better for you, this conversation is for you!
Meet Harry Ho: Your Guide to Home Financing Options
Harry Ho comes to us with eight years of banking experience, making complex financial topics feel accessible and empowering. At BMO, Harry specializes in personal and business lending, helping clients make the best decisions for their unique situations. In today’s episode, Harry shares the types of loans BMO offers and explains how each can be used to make your ADU dreams a reality.
Harry’s warmth shines through as he explains the nuances of lending and loans. His goal is simple: to help you see your home not just as a roof over your head, but as a powerful asset. He says, “Think of your home as a treasure chest.” It’s a resource you can tap into, not just in an emergency, but to make transformative changes in your life.
The Power of Home Equity: Why a HELOC is Ideal for ADU Projects
Harry introduces the Home Equity Line of Credit (HELOC) as one of the most flexible options for homeowners who want to start an ADU project or undertake renovations. Here’s why a HELOC is so powerful: you only pay interest on the amount you actually use. So if you secure a $200,000 line of credit but only need $50,000 initially, you’ll only pay interest on that $50,000. As your project progresses and new phases begin, you can draw more funds as needed—meaning you’re only paying for what you use, when you use it.
For anyone embarking on a phased project like an ADU, a HELOC can be a game-changer. Noura and Harry discuss the cost-saving benefits of this approach in detail, highlighting how homeowners can fund their projects in a way that minimizes monthly expenses.
Cash-Out Refinancing vs. HELOC: Choosing the Right Fit
In addition to a HELOC, BMO offers a Cash-Out Refinance option. Harry breaks down the differences, explaining that with a cash-out refinance, you replace your current mortgage with a new one, receiving a lump sum of cash to use for your project. However, you’ll also be taking on a new loan term (typically 15-30 years) at the current interest rate, which may not be ideal if rates are high.
With a HELOC, on the other hand, you don’t have to touch your primary mortgage. This option keeps your original mortgage intact, allowing you to tap into your home’s equity with more flexibility and less financial commitment. Harry emphasizes that for most homeowners, especially those working on phased projects like ADUs, a HELOC tends to be the more practical choice.
BMO Bank HELOC Calculator
Fixed or Variable Rates: Tailor Your Loan to Your Comfort Zone
BMO offers both fixed and variable rate options for HELOCs, and Harry explains the benefits of each:
- Fixed Rate: If you’re someone who prefers predictability, a fixed rate can offer peace of mind with consistent payments. While fixed rates are slightly higher, they protect you from market fluctuations.
- Variable Rate: For those comfortable with some flexibility, a variable rate can be advantageous, especially if interest rates drop in the future. With a variable rate, your payments may decrease when the market is favorable, potentially saving you money over time.
Harry’s advice? Choose what makes you feel secure. “It’s about making your dreams happen on your terms,” he says, stressing that financial decisions should be tailored to fit each person’s comfort level and long-term goals.
Calculating Your Home’s Equity: A Simple Breakdown
Harry provides a helpful example of how BMO calculates HELOC eligibility. If your home is currently valued at $1 million and you have an outstanding mortgage balance of $150,000, BMO can lend you up to 80% of your home’s value. In this case, that would mean a line of credit of $650,000. As Noura points out, this flexibility can give homeowners the freedom to fund major home improvements and even dream projects without touching their everyday savings.
Meet Nam: BMO’s Multi-Lingual Banker and Community Champion
To round out the conversation, Harry introduces us to Nam, another senior banker at BMO Westminster who’s fluent in both Vietnamese and English. Nam emphasizes the team’s commitment to serving diverse communities and ensuring that everyone has access to the financial tools they need. “For a lot of people, home equity is your rainy day fund,” Nam explains, “and we’re here to help them understand how to use it wisely.”
Both Harry and Norm believe in the importance of community and strive to make their branch a welcoming place where people can come for support. As they put it, BMO Westminster is more than a bank; it’s a partner in helping people unlock their financial potential.
Why Unlocking Your Home Equity is a Life-Changing Decision
In an inspiring close, Noura and Harry discuss how homeowners can use home equity to bring long-held dreams to life, whether it’s an ADU, a renovation, or a smart investment. Harry’s closing words are simple but powerful:
“Your home is your treasure. Unlock it, and unlock your life.”
If you’re ready to explore your options, Harry and the BMO Bank Westminster team are here to guide you every step of the way. Visit them at 7751 Westminster Boulevard in Westminster, CA, or give them a call at 714-893-2431. Whether you’re dreaming big or just need advice on the next steps, the BMO team is ready to help you make it happen.
Tune in to The ADU Show, Episode 17, to hear the full conversation and see how you can use the value in your home to build the future you’ve always wanted.
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