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Home Equity Loans in Whitby

Home equity loans are so called because they are a type of loan secured by real estate. They are generally issued as registered mortgages based on equity. Equity is simply the current value of a home minus all its existing debts. Lenders of this kind of a loan are not bothered by credit score and borrowers’ employment history because equity is more important to them. Our loan professionals have years of experience in providing home equity loans in Whitby and other Ontario cities like Cambridge, Milton, Ottawa, and Mississauga.

Terms and Payment Options for Home Equity Loans in Whitby

A home equity loan is in a real sense an open mortgage with a 7% to 15% interest rate. The first or second mortgage on a property must be repaid within one year but the open clause in the loan agreement allows you to end it early. Doing so, will attract a penalty in interest fees of three months but don’t let that trouble you because it also boosts your credit score in addition to reducing your burdens. Besides the high interest charged on home equity loans, many are still attracted to them owing to their flexibility. Unlike bank and trust union loans, this type can be tweaked to match your special circumstances. Our loan officers are always on hand to discuss available choices to help you make the most suitable choice.

Popular Custom Options Include:

  • Interest Only Mortgage: The principal remains unchanged as only interest is paid
  • Construction Draw Mortgage: We pay service providers and contractors to ensure smooth completion of your project.
  • Blanket Mortgage: In this case, more than one property is put up as security for the same loan. This is an important tactic for borrowers who want to secure enough financing from a single lender.

More options can be added to the agreement to match your unique situation and circumstances. Our experienced officers will listen to you in an attempt to connect you with an affordable yet sufficient home equity loan.

How Much Can I Borrow with a Home Equity Loan

You cannot get a loan until the lender has calculated a special metric best known as LTV. Loan to value references the total of mortgages divided by appraised price of a property. Obtaining this value helps them decipher how much equity is left and if it is enough to act as loan security. If your property’s LTV is above 85% lenders will shun your application as it indicates a risk too big to bear. Our private lenders are in a category that will lend up to 85% LTV but there are some creditors who also consider credit scores and job history before approving loans.

Common Uses for Home Equity Loans

There are no restrictions on how you may use the money because our lenders understand that you know your needs better than anyone. When we ask your reasons for requiring the loan, it is for nothing but record keeping. Some of the best uses of loan money our officers have come across are payment of debts, investing in education and business. A few people use their loans to buy holiday packages or luxury vehicles.

  • Debt Consolidation: Experts advise people to take home equity loans when they are overburdened by multiple monthly payments of several high-interest debts. It is more manageable and chances of ruining your credit score are certainly lower than when you have too many payments to keep up with.
  • Education: The money can be used to pay school fees for kids or college fees for adults.
  • Business Investing: People who have dreams of starting a business may use home equity loans as a convenient source of capital.
  • Renovation: the money can be used to make repairs or important value addition upgrades to the loan.

The least common uses for this money are stopping a power of sale, foreclosures and paying for emergency medical care.

Differences between a Home Equity Loan and Home Equity Line of Credit (HELOC)

While both types of credit are approved based on equity, there are stark differences between them. Home equity loans are a type of installment product whose payment terms and interest rates are not negotiable. The money cannot be taken out at once because after the original sum other contracts must be drawn to release more funds. Home equity lines of credit can only be compared to credit cards-revolving types of credit whose terms often vary. This loan can be withdrawn at any time as long as you stick to the credit limit.

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