Home equity loans are secured by real estate by lenders who rely on a property’s equity as the name suggests. To calculate equity a lender has to subtract debts from the current price of the property. Home equity lenders are not as concerned about bad credit score because equity is enough for them to determine eligibility. Our team of loan experts has experience in providing home equity loans in Markham.
A home equity loan is generally usually a first or second mortgage with a typical one-year repayment term. You must pay 7%-15% interest and be an open mortgage you are allowed to end it early. If you decide to take this option you must part with the equivalent of three moths interest as a penalty for ending the mortgage before its is time. The money from a home equity loan can be used to for any of your needs.
There are many more custom options that can be included in the registered agreement, and our consultants are ready to help you decide on the most suitable options for your needs.
Lenders assess the price of a home and then compare it to debts on it to determine the amount to lend. The risk carried by a property is determined by calculating its loan to value ratio. This metric is obtained by dividing total property loans by the current price of the property and it should be a maximum of 85%. Our lenders will give home equity loans in Markham to a property with under 85% LTV but note that there are lenders who may be sensitive to other factors like credit score and employment history. If you have enough property you can access the equity in it so you can use the money to actualize your dreams.
You can use the money for any financial needs but our company commonly sees people who use it to pay off debts, education, living expenses, and business funding. Some people have less pressing matters to attend to like vacations and luxury car purchases. Whatever you decide to do with the money depends on your needs and preferences.
The loans we provide might also be used to pay for emergencies like stopping foreclosure and stopping a power of sale among others.
Home equity loans have fixed rates and payment terms while home equity lines of credit are more flexible. Home equity loans are similar to installment loans with the same interest rates throughout. With a Home Equity Line of Credit, you can withdraw whatever amount of money you wish to have but within the set credit limit. If you choose a home equity loan, though, there will be a lump sum provided, afterwards a new contract must be drawn to approve more funds. There are more differences but one thing is similar, approval for both these types of financing depends mainly on the LTV of the home.