Home equity loans are given against real estate as security. Lenders of this kind of a loan do not consider credit score but instead rely on home equity to determine creditworthy borrowers. This is unlike traditional lenders who only give out loans to people with high credit scores. We are such lenders who have been providing home equity loans in Orangeville and other cities in Ontario.
Terms and Options for Payment of Home Equity Loans in Orangeville
Before accepting the loan offer, it is important for you to understand what it entails. In this case what you are really getting is an open mortgage on the property which must be repaid in a period of one year. The interest rates for the first or second registered mortgage range from 7%-15% and you are free to end it early. Choosing this option leads to a fine of three months interest fees. To protect the lenders interest a registered mortgage allows them to sell off any property in default. The strict rules don’t seem to deter clients, with home equity loans being some of the most popular in the market. People prefer these loans which can easily be customized to the user’s needs, unlike bank mortgages that follow a pre-drafted agreement.
Examples of Tailored Loans
- Interest Only Mortgage: This is a situation where you only need to pay interest without affecting the primary value.
- Construction Draw Mortgage: This is a loan given to pay workers for flawless completion of a construction project.
- Blanket Mortgage: For this loan, more than one property is used as security. This tactic is common among business owners trying to secure large amounts of money from a single lender.
Our vibrant team is ever pleased to discuss your situation and recommend a home equity loan most suited to you. Feel free to explain things in detail to our professional so that the loan terms and conditions may allow you to use it as you like.
How Much of a Home Equity Loan are you Eligible for
The amount of money a lender is willing to offer depends on the equity. The value of a home minus all debts informs their lending decision. They need to calculate loan to value ratio by dividing debts by appraised property price. Our home equity lenders are willing to lend loans to a property with up to 75% LTV. They can work with 15% equity but anything less means that they are unlikely to recoup after other lenders have been compensated from the sale of a property in default. While credit score and job history are not needed to approve your loan, some lenders rely on it to determine how much interest they can charge. If you meet the criteria and are ready to accept the terms, our lenders will offer a reasonable amount of money to use as you want.
How is the Money Used
A home equity loan has several purposes according to the borrower’s priorities. Through contact with several borrowers, it is easy to recognize that more uses are more popular than others. Fortunately, home equity lenders allow you to put the loan to any use without restriction. It is for this that you find people buying cars or paying for vacations using their home equity money.
- Renovations: Loan money is often used to make repairs or necessary improvements. A new bathroom or kitchen arrangement might increase comfort but there are home improvements simply designed to increase its value. Upgrading security or adding an extra room are good value addition moves that could use a home equity loan.
- Business Investing: This money is a popular source of business capital.
- Education: Home equity loans often act as a source of school fees when things are tight.
- Debt Consolidation: You can use the loan to pay off other expensive loans so you can pay less interest in the long-term.
Our home equity loans in Orangeville have much more uses including helping loved ones and paying emergency medical expenses.
Home Equity Loans vs. Home Equity Lines of Credit
Many people think they are the same but home equity loans and home equity lines of credit couldn’t be more different. An HELOC is a type of revolving credit with negotiable terms and interest fees. A home equity loan is to be repaid in fixed monthly installments. The only similarity is that approval for both loans you must present sufficient equity.