If you own your own home, in the process of paying off your principal mortgage, equity is slowly building in your property. Knowing the equity is there can not only be a financial boost, but this equity can also be tapped into for different expenses. Equity can also be utilized to help with the overall refinancing of your property if payments temporarily become difficult.
Certainly, with the ongoing Pandemic, many Ontario homeowners have faced a financial squeeze. You may be looking to ease this temporary financial burden by taking out a loan. A financially savvy decision would be to utilize the money that has already been built in your own home rather than take out a personal loan. This way there is only one payment to worry about and the loan is secured against most likely your biggest asset.
A Home Equity loan represents one such option. With a home equity loan, just as the name indicates, the money that you are borrowing comes from your equity and can be used for a multitude of purposes. Most Home Equity Loans represent a mortgage that is registered on your property or a given piece of real estate.
What is a Home Equity Line of Credit (HELOC)- What is the Main Difference?
Your home can also be leveraged to take out a Home Equity Line of Credit (HELOC) but a HELOC differs in several ways from a Home Equity Loan. A HELOC is a revolving line of credit that can help ease immediate financial needs by making ongoing payments. These are still registered mortgages and secured against your property but are structured as a line of credit to access funds.
If you are looking to consolidate expenses such as multiple high-interest credit card payments, a HELOC could suit your purposes, however, it still represents a line of credit secured against your home. Both a HELOC and a Home Equity Loan are designed to allow you to make payments that fit comfortably with your budget and other ongoing expenses using the equity in your home.
Home Equity Loan Rates, Terms and Repayment
Home Equity Loans have quite flexible terms. Generally, a Home Equity Loan will be an open one-year first or second mortgage. The interest rates that one could expect, tend to be higher than a standard 25 year amortized mortgage. These loans are usually provided by non-bank lenders and carry rates between 7% to 15%. This is a short-term loan so higher interest is paid for a much shorter period.
Home Equity Loans are also open mortgages allowing for the option of terminating the loan early with only a three-month interest penalty fee. Three common home equity loans options available include:
- Interest-Only Mortgage– The homeowner is only required to make interest payments and not the principal loan amount.
- Blanket Mortgage- In this mortgage arrangement to secure financing, the homeowner will secure the loan against several properties.
- Construction Draw Mortgages- This mortgage loan allows the lender to pay for ongoing construction costs
What Should I Know About Debt Consolidation? Home Equity Loan Or Home Equity Line of Credit?
At times the number of debt payments can become too much for Ontario homeowners. Debt consolidation can help take the financial pressure off by providing for a loan that consolidates all other debts, resulting in one monthly payment to fit into your overall budget.
When considering taking out a home equity loan you can negotiate a lower overall interest rate compared to higher interest loans such as credit cards. Banks will offer home equity loans, however, they will require a very good credit score and solid credit. The term length of a home equity loan, whether you decide to apply through a bank or a private lender will be on a short-term basis. This financing is meant to provide short term financial solutions to help eliminate having to pay multiple monthly loan payments.
At Mortgage Broker Store we can look at all home equity loan options and work to customize a loan arrangement that would fit your financial concerns. To qualify for a home equity loan, we will be assessing the appraised value of your home and determining the overall Loan To Value (LTV) of the property. This is a method of determining the amount of equity in your property minus any debts that are owing on the property.
Most private lenders will not issue an equity loan with an LTV of higher than 75% ( or 75% of the appraised value of the home). Generally, lenders will be looking to secure a loan against a property with at least 25% existing equity.
Steps to Get a Home Equity Loan
Once you have decided to apply for a home equity loan it is important to know what measures must be taken to ensure approval. If applying through a bank your debt ratio will be scrutinized as well as your creditworthiness and your home value. Banks will calculate Loan to Value (LTV) based on a recent appraisal of your property and determine your capability and reliability to pay back the loan.
If you choose to go through an Ontario private lender the process will be similar, You should expect to:
- Have a recent appraisal of your property
- Know your beacon score and work to improve it
- Make a list of all your outstanding debts
- Sit down with a private lender to negotiate mortgage rates and loan amount
Most Ontario homeowners look at home equity loans as a viable option for several reasons:
- To reduce the number of monthly debt payments
- Negotiate a lower monthly interest rate on debt payments
- Make one lump sum payment rather than multiple debt payments.
Mortgage Broker Store Can Help in Your Search for Bad Credit Loan Options
Mortgage Broker Store can help connect you to an appropriate private lander to meet your home equity loan needs. We understand the concerns of the borrower and we are always striving towards finding the best match when looking at your particular mortgage and financing goals.
We work with a network of private lenders across the country and are more than happy to guide you in important decisions that you will be making during the private lending process. To obtain a bad mortgage loan, feel free to contact us at your convenience. We will steer you in the right direction in your mortgage search.
For services in Cities and Towns across Ontario, please see below for more details:
Home Equity Loans in Ontario
You have heard it before. Tap into the equity built up on your home. Why not try to consolidate your existing multiple debt payments and roll them into one monthly, easy to manage debt payment. By applying for a home equity loan, you are not only taking advantage of funds already built up in your property, but you can now look forward to one monthly payment with a lower interest rate than other high interest debt you may have including credit card payments.
Mortgage Broker Store can help you with any concerns you may have when applying for a home equity loan. We have vast experience in negotiating mortgage loans ranging from home equity loans to second mortgages, bridge loans and consolidation loans. With access to a vast network of private lenders across the Province of Ontario we will be able to connect you with a private lender to suit your needs and help you achieve financial peace of mind even if current credit issues have been a deterrent with other lending options. Learn more about obtaining a Home Equity Loan in Ontario
Second Mortgages in Ontario
When finances may be tight and credit may be a problem, looking into various lending options using your biggest asset can provide a sensible solution. Ontario homeowners can take advantage of existing equity in their home to take out a second mortgage loan secured against their property. If your credit score has been damaged as an Ontario homeowner you can turn to Ontario based private lenders to negotiate a secured second mortgage.
Mortgage Broker Store is here to help Ontario homeowners with any second mortgage applications. If the banks have turned you away we will be able to look to criteria beyond credit worthiness to help secure a second mortgage loan on your property. With a network of established private lenders across the Province, we will be able to work with you to tap into your home’s equity to take out a second mortgage. We will help free up money in your home to put towards immediate financial concerns such as home renovations, student loans or easing the strain of your primary mortgage. Learn how to get a Second Mortgage in Ontario
Private Mortgage lenders In Ontario
Ontario homeowners have a wide range of options when it comes to choosing a lender. Generally lenders will fall into 3 broad categories which include A lenders ( big banks), B lenders ( credit unions and trust companies) and C lenders ( private lenders). With increasingly stringent criteria imposed on Ontario homeowners when applying for mortgage loans by A lenders, many Ontario based borrowers turn to B lenders to apply for financing. If credit is in issue, however, these borrowers will not qualify for a mortgage loan. Don’t despair, private lenders will be able to negotiate loans based on other criteria including existing assets, all sources of income and the appraised value of your home.
Mortgage Broker Store is here to help Ontario homeowners with any mortgage loans that you may require, be it second mortgages, home equity loans, Home Renovations Lines of Credit (HELOC), bridge loans and consolidating loans. With access to a well established network of private lenders across the Province we will address your financing concerns and connect you with a private lender to negotiate mortgage loans to cover short term financial needs while you work to restore your credit. Learn more about Private Lenders in Ontario
Reverse Mortgages in Ontario
Ontario homeowners take pride in their homes. You have worked hard to pay off your principal over the years and look forward to owning your home outright. If you are 55 years or over your financial goals may have changed. You may also be in the enviable position of having paid off the principal of your mortgage loan or the bulk of it. If you are looking to pay for upcoming expenses such as possible home renovations, helping grandchildren or your adult children with finances, don’t take a personal loan, tap into the equity of your house with a reverse mortgage. Reverse mortgages can help you achieve peace of mind while taking advantage of the equity in your valued home.
Mortgage Broker Store can help you in your quest for a reverse mortgage. We are in the enviable position of having access to a vast network of Ontario based private lenders that will answer any question you may have. We will sit down with you and take you through the process of applying for a reverse mortgage. You have worked hard to own your home now make your home work for you. Learn more about Reverse Mortgages in Ontario
Bad Credit Mortgages in Ontario
Even if you are having current credit issues there are still lending options open to you. As an Ontario homeowner or borrower you may have been turned away by the big banks or credit unions based on your credit score. Private lenders can help bridge this financing gap by providing you with different secured mortgage loan options. We will base the criteria of these loan applications on factors beyond your current credit score. By accessing any additional assets you have, looking at all sources of monthly income and assessing the appraised value of your home private lenders can secure a mortgage loan to meet your short term financial goals.
Mortgage Broker Store can steer you in the right direction when applying for a bad credit mortgage. We have access to a broad range of private lending options, each with valuable experience and well established in the Province of Ontario. We will be able to address any questions you may have and work with you to solve your lending needs despite current credit issues. Learn more about how to obtain a Bad Credit Mortgage in Ontario
Debt Consolidation in Ontario
There is nothing worse than debt to provide ongoing worries. Multiple debt payments may give you sleepless nights. Ontario homeowners do have options to help navigate debt concerns. Rather than taking out another potential personal loan, look to utilizing existing equity built in your home to address ongoing financial issues. Even if your credit is damaged and the big banks may not be an option, there are many Ontario based private lenders that can work with you to take out a consolidation loan such as a home equity loan or Home Equity Line of Credit (HELOC). Don’t let credit issues dissuade you from taking the steps necessary to consolidate your multiple monthly debt payments into one monthly payment utilising funds that have built up on your property.
Mortgage Broker Store has access to a vast network of private lenders across the Province of Ontario that enables us to connect Ontario homeowners and borrowers with a private lender to address any credit issues while negotiating private mortgage loans. We will address any questions you may have and work with you to help you achieve your lending needs. Learn how to Consolidate Your Debt in Ontario
Stop Power of Sale in Ontario
If you have been late in mortgage payments and are currently in default of your mortgage loan, you may have found yourself in the midst of the process of Power of Sale on your home. Although there are legal issues to address, there are still steps that can be taken to possibly stop the Power of Sale going through on your home. Power of Sale still takes time and there are steps that your lender must follow in order to legally carry out a power of sale on your property. It is not too late to sit down with a private lender and take the necessary immediate steps to stop a power of sale going through on your home.
Mortgage Broker Store is here to help you in taking the steps to try to prevent a power of sale going through on your home. We have access to a broad network of private lenders across the Province of Ontario that are both experienced and well established. We will sit down with you, answer any question you may have while working with you to move forward on stopping a power of sale on your valued home. Learn more on how to Stop Power of Sale in Ontario