Loans secured by a home are best known in the real estate scene as home equity loans. They are much different from bank loans from their interest rates to the terms and conditions of payment. To get a home equity loan, lenders must be sure of the equity in the property. Equity is generally the loans on a property and the debts it has. Our lenders have several years of experience offering home equity loans in Halton Hills and other cities in Ontario.
Payment Conditions and Terms for Home Equity Loans in Halton Hills
As this is either your first or second open mortgage on the property, lenders will extend the loan at 7%-15% interest. These fees must be repaid within one year but you can do it earlier if possible. This adds up to a great credit score in the end but there is a three-month interest penalty fee charged. Despite this, home equity loans are still a popular choice among borrowers seeking flexibility. Our loan officers can discuss your options as they help you get a custom home equity loan in Halton Hills Ontario.
Popular Choices Include:
- Blanket Mortgage: Where more than one property acts as security for the same loan in a borrower’s bid to get more funding.
- Interest Only Mortgage: This is where only interest is to be repaid and principal remains untouched.
- Construction Draw Mortgage: We can pay your construction contractors to finish your project without stalling due to lack of funds.
Many options could be added to a mortgage agreement as our professionals try to design a fully custom home equity loan for Halton Hills.
How Much Can You Borrow with a Home Equity Loan
Home equity lenders can only make this determination by looking closely at the debts you have compared to the price of the property you present as security. Dividing the total value of debts by the appraised property price results in a value known as loan to value (LTV), which helps home equity lenders decide who to assist. Our home equity lenders in Halton Hills are ready to lend loans up to 75% LTV. Some lenders rely on more than the loan to value in order to decide exactly how much money a client should receive.
Common Uses for a Home Equity Loan
Home equity loans have many uses at least according to our professionals who have identified some of the most common in Halton Hills. It is a popular way of settling loans, paying for living expenses and even paying for children’s education. Some people invest their money in businesses while there are some who simply need it to purchase vacation packages and luxury cars. Unlike banks and traditional lenders, we are very lenient, accepting any reason you give for needing a home equity loan.
- Renovation: Home repairs are very expensive but you can use the loan to make necessary changes.
- Debt Consolidation: It is difficult to keep up with expensive monthly payments for multiple loans. Instead of having multiple loans, experts recommend that, you use home equity to repay such credit and remain with something more affordable and manageable.
- Education: School fees can be expensive but you only need a home equity loan to keep your kids in school no matter how hard things are financially.
- Business Investing: This money often acts as a source of business capital.
The best use for the home equity loan depends on your priorities. It can be the way you stop a power of sale, help friends, or go on a dream vacation, as long as you can honor your end of the deal when the time comes.
The Differences Between a Home Equity Loan and a Home Equity Line of Credit
As the name suggests, the home equity line of credit has flexible rates because it is actually a revolving type of loan. The closest comparison to an HELOC is a credit card while the home equity loan is a type of credit paid in fixed installments for a pre-determined period. In addition, a home equity loan provides a lump sum of money, while an HELOC can be used to borrow money whenever the borrower wants.