Home equity is equivalent to the current value of a home minus the total debts on it. A home equity loan is a kind of loan which is secured against a property. Individuals and institutions that provide such loans offer registered mortgages based on equity while banks focus more on credit score and income. We have a team of loan experts who specialize in providing home equity loans in Brampton.
Terms and Rates for Home Equity Loans in Brampton
Home equity loans are usually first or second mortgages to be paid in one or two years. These are open mortgages, which the borrower can choose to end early. You can end the mortgage early if you can handle the three-month interest penalty. Many people prefer home equity loans over bank mortgages because they are more flexible and easy to customize. Our loan experts are always on hand to discuss your best choices for a home equity loan in Brampton.
Common Custom Options for Home Equity Loans
- Debt Consolidation – The loan may be used to pay off other expensive so you only have to keep up with a single payment.
- Construction Draw Mortgage – This means that we will pay construction contractor as the job is finished.
- Blanket Mortgages – This is where several properties are used to secure a loan as a way if ensuring secure financing.
- Interest Only Mortgage – The principal here is untouched and only the interest is paid.
Even more tailored solutions can be added to the mortgage agreement according to the borrowers’ needs. Our friendly, experienced loan professionals can talk about your situation and advise you on the best option.
How Much Can I Borrow With a Home Equity Loan?
The amount you can borrow against your property depends on the amount of money you own in the property. This is known as equity and can be obtained by subtracting total debts from the appraised selling price of the house. To measure risk posed by the property presented as security, lenders will divide the total value of debts by the selling price to get a metric best known as LTV or loan to value. Our network of home equity lenders in Brampton will only lend loans with 85% LTV or less on the subject property. While the most important thing for private lenders is the LTV, some are also sensitive to employment history and credit score. Such loans can be used to build a better financial future by funding business projects, paying for tuition and other personal expensed using the equity in your home. It is possible to get a home equity loan without much focus on your credit score, unlike with the banks.
Common Uses for Home Equity Loans
We have worked with people who used their loan money for home improving, tax payments, tuition or business capital. The best use of money from a home equity loan depends only on the borrower and their needs.
- Home renovations – Renovating the kitchen or bathroom could add more value so you can sell the home at a better price.
- Business investing – Many people invest home equity loans in a business to improve their financial future.
- Debt consolidation – It is advisable to have one debt than multiple debts with separate interest fees. One debt is easier to manage than several loans from different institutions you can use the home equity loan we provide to pay off expensive loans.
- Education – Pay your children’s tuition fees so they can get a leg up in today’s competitive job market.
The home equity loans we offer in Brampton can be used to pay for many other things including medical bills, stopping power of sale or helping family members.
Differences Between Home Equity Loans and Home Equity Lines of Credit
A home equity loan has fixed terms including the interest rate. This is the main difference with a home equity line of credit or HELOC as it is best known. An HELOC is a kind of revolving line of credit whose interest rates are flexible. An initial large amount is given when you take a home equity loan and a new contract is drawn to allow access to more money. For the HELOC you can withdraw any amount within the set limit. With both types of loans, approval depends on the equity in a home.