Loans that are secured by real estate are basically home equity loans which can be given by private lenders. Credit score or employment history does not bother such creditors but rather, they are keen to know the equity left in your property in their determining who qualifies for a mortgage. We are a company of such lenders who have been providing home equity loans in Fort Erie.
Terms and Rates for Home Equity Loans in Fort Erie
These loans are offered as basic first or second mortgages on a home. You have to pay the loan plus 7%-15% interest in one year. You can take the option to end the loan earlier if you have the money. This, however, comes with a penalty fee of 3 months interest. In spite of the high-interest rates, people are still attracted to home equity loans because of their flexibility. It is possible to customize this loan to your special needs with help from our experienced loan officers.
Common Loan Options Include
As independent entities, home equity lenders do not have to work with a standard mortgage agreement. By disclosing your situation, our loan experts can work your needs into the document to leave you with an affordable, most suitable product.
- Interest Only Mortgage: This is a product whereby only interest is paid and principal remains unchanged.
- Blanket Mortgage: For this type of a loan, you are allowed to present more than one home as security. This eventually helps in securing more funds from the same lender.
- Construction Draw Mortgage: this loan is given to ensure your construction project is complete without a problem.
How Much Are You Eligible For
The loan amount you get with a home equity loan is dependent on how much equity is in your home. To know for sure, the lenders must calculate a value known as loan to value (LTV) ratio. This is done by dividing total debts by the price of a property in the hopes of getting a value below 85%. Our home equity lenders in Fort Erie are keen to avoid lending on a property with too much debt as it only means they might not recoup after default. While loan to value is the most important metric for home equity lenders, some also base their decision on the credit and employment history of the individual. Once approved you will get a reasonable loan amount that you can rely on to meet unique expenses.
Common Uses for this Loan
Our experience with residents of Fort Erie has taught us that there are many possibilities when it comes to spending the money. Some people need it to get out of sticky situations while others simply need to go on a vacation or pay for their expensive cars.
- Renovation: it is common for people to take a loan with the intention of repairing or upgrading their property. Most of these clients do that to sell the home at a higher price or get secure better loan amount in future.
- Education: This loan is often used to finance higher education or to pay school fees for young children.
- Business Investing: Many entrepreneurs use their properties to get much-needed funding for their startups.
- Debt Consolidation: The loan money is usually used to pay off expensive loans to stop endangering the all-important credit score.
Differences Between a Home Equity Loan and Home Equity Line of Credit
The home equity loan is actually an installment loan with fixed terms and conditions. The money is released in phases, for which you must get fresh approval. For a home equity line of credit or HELOC, the terms tend to differ from time to time. You can access the entire loan at any time without having to seek more approval. The only catch with an HELOC is to stay within the set credit limit. Both loans are approved based on loan to value ratio, which is probably why so many people can’t tell them apart. When home equity loans are extended to you, it is so that you may achieve financial obligations but you must remember to honor the loan in order to avoid consequences that might include losing your valued property.