A home equity loan is one in which a piece of real estate is used as security. They are normally given as mortgages, which are registered on a property. To get this loan a lender has to evaluate the equity or simply, the equivalent of a home’s value minus all debts in it. This is much different from a regular bank loan, which you can only get after presenting an acceptable credit score. Our team of professionals has years of experience providing home equity loans in East Gwillimbury.
Terms and Conditions for Home Equity Loans in East Gwillimbury
A standard home equity loan is in an actual sense an open first or second mortgage on the property, with an interest rate of 7%-15%. You are allowed to end the mortgage early by paying a small fee of three months interest. These mortgages are much flexible and can be customized to your needs, unlike ordinary bank mortgages. Our loan professionals can talk to you and choose the best options for you.
Personalized Options Include:
- Blanket Mortgage: More than one property is used as security for the same loan as a borrower tries to acquire more money from the same lender.
- Interest Only Mortgage: This is a loan for which only interest is paid and principal remains unchanged.
- Construction Draw Mortgage: Our company pays your workers to complete your project.
Depending on your needs, more custom options may be included in the loan agreement. Our home equity lenders are happy to talk about your circumstances and the alternatives available.
Amount Available with a Home Equity Loan
The money you can get with this loan depends on how much equity is left on the property presented as security. To establish this, home equity lenders have to calculate a value known as loan to value ratio. LTV s obtained by dividing total debts by the appraised current price of a property. Our network of home equity lenders in East Gwillimbury will normally lend up to 75% LTV on the a property. While this is the most important deciding factor some lenders may also be sensitive to income and credit score.
Common Uses for the Loan
Money given as a home equity loan may be put to many uses according to the borrowers’ priorities. Our officers have seen countless reasons for needing the loan but some are more common than others are. The best uses we have seen are education, debt payment, business capital, and home renovation. There are some people who need it for daily living expenses but on occasion, some people get home equity loans to make car payments or buy vacation packages. As our experts believe, the best use for the money depends on an individual’s special circumstances.
- Renovation: Adding a spare room, installing new appliances in the kitchen or overhauling the design of a home are expensive undertakings. If you need to make any home improvement a home equity loan might come in handy. This makes it easy to sell your home at a greater value or get a bigger home equity loan in future.
- Debt Consolidation: It is advisable to take one big loan with average interest rates than multiple expensive credit cards with monthly payments. A home equity loan can be taken to pay off high-interest debts.
- Business Capital: Home equity loan money might be sufficient to invest in a business of your dreams. This money gives you a chance to stabilize your future finances.
- Education: Pay your children’s school fees using money from the home equity loan.
Loans that we provide in the city have been used for less common reasons like stopping a foreclosure, helping loved ones, or paying medical expenses.
Home Equity Loans and Home Equity Lines of Credit (HELOC)
These are two distinct loans but they are often mixed up because approval for them depends on the loan to value ratio of a property. Besides that, a home equity loan is an installment type with fixed interest rates as opposed to a home equity line of credit with flexible rates. A home equity line of credit is a revolving type of credit like a credit card. You can also access the entire HELOC if you like as long as you don’t exceed the limit.