A home equity loan is one that is given with real estate as security by private lenders who are ready to overlook a borrower’s credit. This is much unlike banks; that only care about one’s credit score before offering a loan. Home equity loans in Cobourg are approved based on the property’s equity.

Payment Options and Interest Fees for a Home Equity Loan in Cobourg

A home equity loan is only given as an ordinary mortgage on the home. Lenders require you to finish paying this plus interest in a period of one year. It is an open first or second mortgage registered on a property. What this means is that you can pay a fine of three months interest to end the loan early if possible. The lender is also permitted to sell your property in the event that you are unable to repay the loan. Unlike the ordinary bank loan, home equity loans are more flexible and can be customized to a client’s personal wishes. We have a loan officer on hand to hear your wishes and give you a home equity loan fully customized to you.

Common Customized Home Equity Loans in Cobourg Include:

  • Construction Draw Mortgage: We give you enough money to pay your service providers and ensure completion of your project.
  • Interest Only Mortgage: The principal remains and you are only required to pay interest.
  • Blanket Mortgage: For this loan, you can use more than one property as security.

More options can be included if you are willing to discuss your circumstances with our home equity lenders in Cobourg.

How Much Can I Borrow with a Home Equity Loan

Loan amounts depend on the equity in each property presented as security. Home equity lenders in Cobourg, ON must calculate the loan to value ratio of a home in Cobourg to decide how much to give and at what interest rates. The all-important metric is obtained by dividing the price of a home with its selling price. Our home equity loans in Cobourg are lent to 75% LTV on the property. Private lenders may not pay much attention to credit score but being super sensitive to risk, they would rather not invest in a property that already has a heavy debt burden.

Common Uses for a Home Equity Loan

Private lenders only want to know why you need a loan to keep accurate records, unlike banks that often reject loans over reasons given. Our lenders believe that you are the best judge of how to use the loan, for you know what your urgent needs are. In our experience with Cobourg borrowers, we have learned of many uses for the loan, top among them being business investing, paying off other loans, and even paying school fees.

  • Business Investing: The loan is a great source of capital for a startup venture.
  • Education: You can keep the kids in school using a home equity loan as school fees.
  • Debt Consolidation: A single big loan is better than multiple high-interest credit cards. Monthly payments are affordable and it is hard to miss a deadline.
  • Renovation: Your loan money might be useful if you ever need to upgrade or repair the home.

Our home equity loans that we offer in Cobourg have much more uses including stopping a foreclosure and helping loved ones. This said you must pay back the loan according to the terms and conditions to avoid losing the valued home.

Home Equity Loans vs. Home Equity Lines of Credit (HELOC)

There are clear differences between the two but many assume a home equity loan to be the same as a home equity line of credit. The HELOC is a revolving loan whose interest rates differ with time. A home equity line of credit is only comparable with a credit card and not the home equity loan. The main difference here is that home equity loan is a type of credit that is repaid in fixed monthly installments with a clear timeline. Approval according to equity is the only reason why many people think a home equity loan is an HELOC and vice versa.

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