Unlike banks, private lenders are ready to bend the rules so that they can provide home equity loans. Rather than look at credit score, they calculate equity in order to decide who is worthy of a loan. Private lenders allow people to access the money tied up in their homes so that they can meet important obligations. Our team of experts has been offering home equity loans in Brant and other cities in Ontario, for many years.
What Are the Terms and Interest Rates
This is really an open mortgage taken for the first or second time on a single piece of real estate. It is offered at an interest rate of 7%-15% for one year but you can finish early if possible. This can allow you to not pay future interest fees but you must pay the next three months interest fees as a penalty. Private lenders offer loans at high interests to cushion against the risks of dealing with low credit clients. This said home equity loans are still popular for their flexibility compared to traditional mortgages. Our home equity lenders in Brant are pleased to help you customize a loan after hearing about your situation.
Custom Loans Sometimes Include:
- Interest Only Mortgage: For this loan, you only need to pay the interest, as principal is untouched.
- Blanket Mortgage: Multiple pieces of real estate are used as security in a bid to secure more funds.
- Construction Draw Mortgage: We can pay your workers to ensure smooth completion of your project.
Our experts appreciate the diverse needs of all clients who need a loan and for that reason, they will work your desires into the loan agreement.
How Much Money Can You Borrow
Loan amounts vary according to the equity in the property presented to cover a loan in case of default. Home equity lenders must calculate LTV or loan to value ratio to make a clear decision on who to lend. Our loan officers follow the general rule of thumb to issue loans to the property with 75% LTV. This is because taking on more risk than that diminished the likelihood of compensation should a borrower fail to repay. Loan to value ratio is obtained by dividing mortgages by the price of a home. Once approved, the home equity loan you receive in Brant will certainly help to accomplish some financial goals.
Common Uses of a Home Equity Loan
You are the best person to decide on best uses of the money and this is why home equity lenders avoid setting conditions on how it should be spent. They will ask why you need the loan to keep records but not to make an approval decision. This way, you can use the money for paying bills, stopping emergencies or purchasing vacation packages.
- Debt Consolidation: It is better to have one loan whose payments you can handle as opposed to several credit cards with inflated monthly rates.
- Home Renovations: It is important that you keep upgrading the home for increased comfort but also to increase its value. The higher a home’s value, the more the equity which is great when you seek a loan with it.
- Education: School fees are expensive but you can keep children in college or pay for your own education using a home equity loan.
- Business Investing: Property owners can make their business dreams come true by taking a home equity loan to invest.
There are many ways this money could be put to use and the lenders do not issue any restrictions. All that is required of you is to pay the loan as agreed to avoid consequences that include losing your valuable property.
Distinctions Between Home Equity Loans and Home Equity Lines of Credit
Application for both loans is consented to according to equity presented but there are stark differences between them. As an installment loan, the interest rates for a home equity loan are fixed. The HELOC boasts flexible rates and it can be used at any time as long as the borrower stays within the credit limit. All loans must be repaid according to the agreement to avoid damaging your credit score. Our home equity lenders are available to help you choose a suitable product that will meet all you needs.