This refers to the type of loan secured by a piece of real estate. Private lenders who are ready to overlook credit, employment, and income history which are all important considerations for banks give it. They simply focus on equity-the appraised the value of a home minus all the debts in it when making lending decisions as real estate is their main business. We are a seasoned team that provides home equity loans in Owen Sound, with several years of experience. Our company also serves other areas like Cambridge, Lincoln, Uxbridge, and Tecumseh to name but a few cities.
This loan is normally given as a first or second open mortgage on a property at 7%-15% interest rates. You are given 12 months to pay the loan in full but as an open mortgage, you are free to finish paying early by taking the three months interest penalty. Unlike a bank mortgage, you also have the option of customizing the loan to your needs. Our experts are ready to discuss your needs and make sure you get a reasonable and most suitable loan for your needs.
Popular Customized Choices Include:
Our loan officers in Owen Sound are ready to add more options to your loan agreement. All this is to make sure that the final product answers to your needs.
The money you can get depends on the remaining equity on the property. They must calculate a value known as LTV or loan to value ratio. It is calculated by dividing the debts on a home by its current market price. Lenders hope for property LTV not exceeding 85% to show them that you still own 15% of the property or more. Our lenders are very sensitive to risk and do not offer loans to a property with more than 85% LTV. While LTV is the key deciding metric, credit score and employment history also influence some lenders’ decision.
Home equity loans in Owen Sound can be used in any way the borrower wants to. During our tenure in this city, our lenders have seen many uses for the money including some that are quite common. Renovation, education, business investment, and loan payment are the most popular uses for the money but some people only need it for personal luxuries. How the money is used depends on the borrower and a moneylender cannot dictate that.
The loans we provide in Owen Sound have less common uses like stopping a power of sale, a foreclosure or even help loved ones out of trouble. Some people also use the loan to pay for medical emergencies.
Disparities between these types of credit couldn’t be greater but because they are both approved based on loan to value ratio, people think they are the same. A home equity line of credit or HELOC is a type of revolving credit like a credit card, which has flexible interest rates. It is possible to withdraw any amount of your credit line without surpassing the set limit. For a home equity loan, you must contend with fixed interest rates, which must be paid for a pre-defined period of time. A good credit score might help you negotiate better interests but it is not the main consideration for approval.