A home equity loan is one that is secured with real estate properties. It is provided by a special kind of creditors who are not bothered by the borrower’s credit. Equity is more important to home equity lenders who are in real estate business. We have a large team with years of experience providing home equity loans in Belleville Ontario.
Payment Options and Terms for Home Equity Loans in Belleville
The typical home equity loan is actually a first or second mortgage on a property. It is offered at an interest rate of 7% to 15% for a one-year term. A home equity loan is also an open mortgage that can be ended early if you like. Choosing this option means, you have to pay three months interest as a fine. Despite these interests, people are still attracted to home equity loans, which are more flexible than regular bank loans. Our lenders in Belleville are always ready to discuss various options to give you a loan that is perfectly tailored to your needs.
Custom Options Include:
- Construction Draw Mortgage: You can approach our company to pay your construction workers with your home as security. This ensures that your project is completed without a hitch.
- Interest Only Mortgage: It is possible to take a loan and pay interest only without any changes to the principal.
- Blanket Mortgage: The borrower may choose to use more than one property as security for the loan.
Our loan experts can include your preferences in the loan agreement so don’t hesitate to explain your situation.
How Much Can I Borrow with a Home Equity Loan
Borrowers qualify for varied loan amounts based on their property’s equity. To make sure that you are worthy of credit the lender must go a step further to calculate a metric known as LTV or loan to value ratio. It is obtained by dividing the total debts on a property with it current market value in the hopes of a result that is below 85%. Our home equity lenders in Belleville are willing to loan up to the maximum LTV, as anything more would be too big of a risk to bear. While loan to value is most important, some lenders also rely on employment and credit score to reach a decision.
We offer reasonable loan amounts that will indeed help you achieve your financial goals in Belleville. You can use the money to pay for education, invest in a business or home renovations.
Common Uses for Home Equity Loans
The home equity lenders in Belleville might ask why you need the money but that is only for records. You are allowed to use the money in the way you like as long as you can repay before the term expires.
- Renovation: You can use the loan to do repairs and home improvements to make things more comfortable and increase the market price of your home.
- Debt Consolidation: It is possible to pay off expensive loans so you remain with only one debt to repay each month. This saves you money in interest fees and prevents your credit score from declining when you forget a payment.
- Education: The money can be used to pay college fees and invest in your children’s education.
Our home equity loans in Belleville allow you to pay for your immediate needs when money is tight. In some cases, home equity is used to stop a power of sale; help loved ones, or pay emergency bills.
Differences With Home Equity Loans and Home Equity Lines of Credit
The term home equity loan refers to a type of installment loan while an HELOC is a type of revolving credit. In simple terms, an HELOC has flexible rates and repayment periods, while for home equity loans, the conditions are non-negotiable after the mortgage agreement is signed. You receive an initial lump sum when approved for the home equity loan. The only similarity between a home equity loan and the home equity line of credit is that both are cleared according to the home’s equity. It is also important to repay on time and as per the agreement to avoid major losses.