Home equity loan is a term referring to credit secured by a piece of real estate. Unlike banks, lenders of this loan hold equity in higher esteem than credit score and job history. A home’s debts and its current price are enough to tell home equity lenders whether an investment is good enough or not. We are an experienced team of loan officers who have been issuing home equity loans in Ingersoll and other parts of Ontario for many years now.
Payment Rates and Options for a Home Equity Loan
This is given as the first or second mortgage on a properly at 7%-15% interest which should be paid within one year. It is an open mortgage meaning that you can repay early if you so wish but by taking a penalty in three months interest fees. Lending money to people with poor credit is a risky affair as you never know when the client will default payments. To protect their interests, the lenders offer a registered mortgage so they can recoup from the sale of a property.
Home equity loans are a popular choice among residents of Ingersoll because of flexibility compared with regular bank mortgages. It is possible to have a custom loan that will solve your financial problems and one that you can afford to repay. We have an officer o stand by to discuss your needs and recommend the most suitable loan for you.
Popular Custom Options Include:
- Interest Only Mortgage: You only need to pay interests on this loan where principal amount is unchanged.
- Construction Draw Mortgage: You can rely on this loan to pay construction workers until a project is completed.
- Blanket Mortgage: You are allowed to use many properties as security when trying to acquire large amounts of funding.
Our officers understand that customers have unique needs and do the best to include them in a mortgage agreement. The result is a tailored loan that you can use to meet various financial obligations.
How Much Can You Get With a Home Equity Loan in Ingersoll
The exact amount you will receive from a home equity lender in the city depends on how much equity is in your home. To make an informed decision, home equity lenders have to calculate a metric called loan to value ratio. This is calculated by dividing the total of debts in a property by is the current selling price. In doing this, they hope to get a result not exceeding 85%, the maximum LTV to which they can loan. According to the Ontario mortgage act, a home equity lender can only claim their money if others who came before have recovered their money. This means that if they lend to property with too many debts, it is much unlikely for private lenders to claim the investment. While the LTV is of utmost importance, you will find some lenders who must factor in credit score prior to approving a loan request.
Popular Uses for a Home Equity Loan in Ingersoll
Our home equity lenders only ask why you need the money to update records, unlike regular lenders who use these details to decide who qualifies. In their encounters with clients, our experts have noticed several uses for the loan and managed to profile some of the best.
- Renovation: The loan comes in handy when upgrading or repairing property to increase its value in the market.
- Education: You can pay school fees using money from a home equity loan in Ingersoll.
- Business Investing: Entrepreneurs who lack capital find home equity to be a useful resource.
- Debts: It is possible to pay other expensive debts using a home equity loan. Rather than multiple expensive monthly rates, you are left with one affordable loan that is more manageable.
Some people use the money to pay for expensive vacations, buy cars, stop foreclosure, or help their loved ones.
Telling a Home Equity Loan Apart from a Home Equity Line of Credit
The home equity line of credit is a different category of credit with revolving terms of payment like those for a credit card. A home equity loan, on the other hand, is a type of installment loan with fixed interest. As is easy to tell, equity is the common factor between the two that helps lenders to reach a decision.