Unlike banks, private lenders follow different rules that allow them to issue loans based on property equity. Home equity loans as they are known, allow people with assists but low credit scores to achieve their financial goals. We are a team of experienced professionals who have been issuing home equity loans in North Bay for many years.
Payment Terms and Options for Home Equity Loans in North Bay
A home equity loan is one that is generally offered at 7%-15% interest for one year. It is usually the first or second mortgage and as an open loan, the borrower may choose to make full payments before the year is over. This is a great thing to do for an improved credit score but be ready to pay a fine in three months interest fees to have lenders accept your early exit. The payment terms and options are rather strict but home equity loans are very flexible, which attracts more clients to them. Unlike regular mortgages, you can have the home equity lender tailor a solution to your current circumstances.
Popular Custom Options Include:
- Interest Only Mortgage: This is a situation where you pay only interest and the principal remains untouched.
- Blanket Mortgage: The borrower may present more than one property for combined equity that will secure them more financing.
- Construction Draw Mortgage: If you are building a property, we pay your construction contractors to complete the project without a hitch.
Our experts will listen to your needs and include them in the mortgage agreement so you end up with a home equity loan that is perfectly tailored to you.
How Much Can I Borrow With a Home Equity Loan
This only becomes known when a lender sees your home’s debts and its current selling price in North Bay. With these, they can calculate the most important metric; loan to value (LTV) ratio. They only need to divide the total of debts against the house and divide this by the appraised price to measure LTV, which should not exceed 75%. Our home equity lenders in North Bay are willing to offer up to 75% LTV on the property as it means they could recover some investment if you default. Anything higher than 75% shows that the borrower bears too little equity to profit a home equity lender.
With enough equity, we provide reasonable loans that can help our clients pay bills, loans or even invest in profitable ventures.
Common Uses of the Home Equity Loan
Having worked with so many people in the city, our lenders have compiled some of the most common uses for the loan that they encounter. You are free to use the loan money as you wish because unlike banks, private lenders do not reject applications based on the reasons given for needing a loan.
- Education: Parents often take home equity loans to fund their children’s higher education.
- Business Investing: More often than not people need the equity in their property to fund a business or expand one.
- Renovation: Some people take the loan to repair and upgrade their homes to sell at a higher price.
Many more options can be included by our experts who understand how unique your needs are from those of other customers. Some use the loan to pay for expensive trips, buy cars, or help loved ones. Many have been ale to save their properties by stopping a power of sale using their loan money. As long as you repay on time, home equity lenders in North Bay do not mind how the money is used.
Home Equity Loans and Home Equity Lines of Credit (HELOC) Compared
Like a credit card, the HELOC is a type of revolving credit whose payment terms and conditions may differ from time to time. As an installment loan, the home equity line of credit has a fixed interest rate. In addition, the lender issues a lump sum of money, and more money cannot be borrowed under the existing mortgage. This is different with a home equity line of credit, which is accessible to the borrower whenever they need it. You must be careful, though, to stay within the HELOC credit limit.