A home equity loan in Etobicoke, Toronto is a kind of loan with real estate as collateral. This type of loans is usually extended as a registered mortgage and approval is dependent upon equity in the property. Equity is the value of property minus all debts against it. They are much apart from bank loans which are approved based on credit score. Our professional team of experts have been offering home equity loans in Etobicoke and other neighbourhoods in Toronto.
Payment Alternatives and Conditions for Home Equity Loans in Etobicoke
The standard home equity loan is really a one year open initial or subsequent mortgage. Typically, you are required to pay an interest rate of 7%-15% each month but as an open mortgage, you can also take the option of ending it early. Different from bank loans, home equity loans can be tailored to the client’s specifications. Our loan experts are always prepared to discuss the best home equity loans for your specific situation.
The Popular Tailored Options Include
- Interest Only Mortgage – For this loan, you only have to pay loan interest and principal amount remains unchanged.
- Construction Draw Mortgage – In this situation we pay your contractors to ensure your building project progresses uninterrupted.
- Blanket Mortgage – For this loan, you can present multiple properties at once in a bid to secure more financing.
These are some of the custom options that home equity borrowers prefer. Our professionals can write more variations of the agreement and they are ever pleased to discuss your circumstances and recommend the best solution for your needs.
How Much Can You Borrow with a Home Equity Loan
This depends on the value of your home and its debts. For potential creditors to know how much of a risk you are exactly, they must calculate a metric called loan to value (LTV) ratio. This is the value of total debts on a home divided by its most recently estimated price. Lenders in our network will only loan to 75% LTV on a property in Etobicoke. Some lenders only lend on equity but others may approve loans based on credit score, employment history and even income. By giving home equity loans, lenders give clients a rare chance to utilise their properties in a gainful manner like construction or tuition fees. It is simply using personal assets for your own gain even when the banks have rejected you.
How are Home Equity Loans Commonly Used
The money is available for you to use, as you like, as the private lenders do not restrict its use. Our company has worked with many people who often invest their loans in home improvement, paying expensive loans, higher education or funding business projects. Some people buy cars with their loan or even go on a vacation. How the money is used depends on the financial needs of the client in Etobicoke.
- Debt Consolidation – The money can be used to pay expensive debts leaving you with a single, more manageable home equity loan.
- Education – A home equity loan can be used to pay expensive tuition fees
- Business Investing – The loan can also be a great source of capital for your new business
- Renovation – You can upgrade or make home improvements but that is an expensive venture. Fortunately, an expensive home renovation project can be financed by a home equity loan.
Our loans that we provide in Etobicoke have other uses such as to stop foreclosures, help family members or seek emergency treatment.
Comparing Home Equity Loans and Home Equity Lines of Credit (HELOC)
People constantly confuse between them and that is probably because both kinds of credit are approved on the basis of equity. Home equity loans have fixed terms and interest rates while those for a home equity line of credit are quite dynamic. With an HELOC, you can take any amount at any time but things are different with the home equity loan. For this, you get a lump sum and after finishing it you must have another contract drawn to prompt release of additional money from your home equity loan. The loan to value is the measure of risk for both loans as it tells the lender whether there will be enough for them to be compensated when you default.