Home equity loans are secured by real estate by lenders who rely on a property’s equity as the name suggests. To calculate equity a lender has to subtract debts from the current price of the property. Home equity lenders are not as concerned about bad credit score because equity is enough for them to determine eligibility. Our team of loan experts has experience in providing home equity loans in Markham.

Payment Options and Conditions for Home Equity Loans in Markham

A home equity loan is generally usually a first or second mortgage with a typical one-year repayment term. You must pay 7%-15% interest and be an open mortgage you are allowed to end it early. If you decide to take this option you must part with the equivalent of three moths interest as a penalty for ending the mortgage before its is time. The money from a home equity loan can be used to for any of your needs.

  • Blanket Mortgages – The loan is placed on many properties at once for more secure financing. A loan against more properties means more equity, which guarantees more money to serve your needs.
  • Construction Draw Mortgages – We will pay your contractors as your project continues. This means that your business venture will not stall due to lack of finances.
  • Interest Only Mortgages – In this case, the principal remains the same and only interest is paid.
  • Debt Consolidation – Loan money can be used to pay off expensive debts and leave you with more manageable loans to take care of. Experts advise people with bad credit to consolidate their debts so they are more affordable and manageable.

There are many more custom options that can be included in the registered agreement, and our consultants are ready to help you decide on the most suitable options for your needs.

How Much Can you Borrow With Home Equity?

Lenders assess the price of a home and then compare it to debts on it to determine the amount to lend. The risk carried by a property is determined by calculating its loan to value ratio. This metric is obtained by dividing total property loans by the current price of the property and it should be a maximum of 75%. Our lenders will give home equity loans in Markham to a property with under 75% LTV but note that there are lenders who may be sensitive to other factors like credit score and employment history. If you have enough property you can access the equity in it so you can use the money to actualize your dreams.

How are Home Equity Loans Used?

You can use the money for any financial needs but our company commonly sees people who use it to pay off debts, education, living expenses, and business funding. Some people have less pressing matters to attend to like vacations and luxury car purchases. Whatever you decide to do with the money depends on your needs and preferences.

  • Renovations – Improving your home helps in increasing its sale value.
  • Debt Consolidation – You can use the loan to pay off expensive debts.
  • Education – Loan money may be used to cover tuition fees.
  • Business Investing – The money can be used to fund a business project.

The loans we provide might also be used to pay for emergencies like stopping foreclosure and stopping a power of sale among others.

Differences Between Home Equity Loans and Home Equity Lines of Credit

Home equity loans have fixed rates and payment terms while home equity lines of credit are more flexible. Home equity loans are similar to installment loans with the same interest rates throughout. With a Home Equity Line of Credit, you can withdraw whatever amount of money you wish to have but within the set credit limit. If you choose a home equity loan, though, there will be a lump sum provided, afterwards a new contract must be drawn to approve more funds. There are more differences but one thing is similar, approval for both these types of financing depends mainly on the LTV of the home.

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