A home equity loan is a loan secured against real estate properties. Private lenders who are ready to overlook a client’s credit score by focusing on equity to decide mainly offer this kind of loan. We are a team of professionals in the loan business who are always willing to give home equity loans in Newmarket.
Rates and Payments for Home Equity Loans in Newmarket
A home equity loan is actually a standard open mortgage typically offered at 7%-15% to people with enough equity. It could be your first or second mortgage on the property but often, a home equity loan should be repaid within 12 months. The open clause on this loan means that borrowers may choose to end things early but if they do, a payment of 3 months is needed as a fine. This penalty should not deter you from paying before the due date as it saves lots of money and eventually leads to an improved credit score. The terms of a home equity loan are more flexible than those of a traditional bank mortgage, which is definitely the reason why so many people seek it. We recognize our clients’ needs and try our best to customize home equity loans in Newmarket and other Ontario cities.
Customized Loans Include:
- Interest Only Mortgage – This is a situation where the principal remains, as only interest should be paid.
- Blanket Mortgage – To secure more financing, you can put up multiple properties as security for the same loan.
- Construction Draw Mortgage – You can have us pay your contractors until your home is complete.
There are many variations to the standard mortgage agreement and our loan officers are always there to help you choose the most suitable home equity loans in Newmarket.
How Much Can you Borrow with the Home Equity Loan
If there is enough equity, private lenders will definitely extend funding to clients. What you ultimately receive depends on a loan to value ratio obtained by dividing total property debts with its market price. This number should not exceed 75% for private lenders to approve a loan application. A high LTV means little equity for the lender to utilize. Despite their indifference toward credit score, home equity lenders are very sensitive to risk and will not dare give loans where equity is insufficient. If you have enough equity and a great score, it is possible to negotiate better terms for your home equity loan in Newmarket.
Popular Uses for Home Equity Loans in Newmarket
People use the loan for different needs but there are some we encounter more often than others. Many borrowers take home equity loans to pay off debts and meet certain financial obligations but there are some who simply need it to fund their businesses. In some cases, a homeowner wants to access equity tied in the property to pay for a dream vacation. Whatever you do with this loan, it is important that you repay on time to avoid ominous repercussions.
- Business investing – The money can be used to start, buy inventory or even expand a business.
- Education – Home equity loans can pay your kids’ school fees when things are tight.
- Debt consolidation- people usually pay off high interest loans using the loan money.
- Renovations – Upgrading your home is the best way to increase its value. This is useful when you need more financing in future or when you decide to put up a property for sale.
Differences With a Home Equity Loan and a Home Equity Line of Credit (HELOC)
HELOC is the acronym for home equity line of credit, another type of credit that is often confused with a home equity loan. The main difference between an HELOC and a home equity loan is that for the latter, terms are fixed. As a type of installment loan, payment terms and interest rates of a home equity loan remain the same. Another difference is that you access a home equity loan in different phases, all of which require a separate contract. The HELOC can be withdrawn at any time but staying within a pre-determined limit. The only comparison between home equity loans and lines of credit is that both are approved according to the equity in a piece of real estate. Our loan experts are available to answer your questions and help you customize an appropriate home equity loan in Newmarket Ontario.