Loans secured by the property are known as home equity loans. These are provided by lenders who do not follow the same approval process as banks do. Institutional lenders like banks and credit unions mainly rely on credit and income to approve or reject loan applications but private companies refer to equity. We are a professional team of experts who have been providing home equity loans in Oshawa and other cities in Ontario.
Payment Options and Terms for Home Equity Loans in Oshawa
This is either your first or second mortgage on the property for which you need to pay 7%-15% interest. As an open mortgage, you can repay before the one-year term is over but for that to happen clients must contend with a fine of three months interest. Home equity loans are much sought after because it is possible to customize it according to your needs. This is different from bank mortgages, which often have fixed terms. Our loan specialists are always prepared to answer your questions and help you get the best home equity loan in Oshawa.
Common Customizations Include:
- A Blanket Mortgage – Loans where many properties are used as security.
- Construction Draw Mortgage – This is where we pay contractors until the project is completed.
- Interest Only Mortgage – With this, your principal never changes, as you only need to pay interest on the loan.
Our specialists can include more variations that you may prefer, as they understand that the best loan is one that meets clients’ needs.
How Much Can you Borrow with this Loan
The loan amount you are eligible for depends on how much equity there is left in your property. To see just how much risk you pose, lenders must calculate the property’s loan to value ratio. This metric better known as Loan to Value (LTV) is an important measure that determines the final loan amount you will get. If LTV is above 75% lenders will automatically reject your request. Our home equity lenders in Oshawa can lend up to 75% LTV on the property and a good score might contribute to a better rate.
Home equity lenders in the city will provide loans that can be used for personal expenses or urgent bills. It is a different kind of loan that gives you a shot at a bright financial future utilizing the equity in assets under your name.
Common Uses for Home Equity Loans
Home equity lenders in Ontario might ask your reasons for needing the money but that is not part of the approval criteria. This is only meant for record keeping meaning that you can use the money anyhow as long as you can repay on time.
- Renovation – The loan is useful for repairs and home upgrades that increase both value and comfort.
- Debt consolidation – People with many high-interest loans use their equity to repay and have a single loan to manage.
- Education – Home equity could fund your college education or pay your children’s tuition fees.
- Business – Use the equity in your home to finance a profitable business venture.
The home equity loans we offer in Oshawa city Ontario are important as they could also be used to help out your friends, stop a power of sale, or pay for emergency medical treatment.
Differences Between Home Equity Lines of Credit (HELOC) and Home Equity Loans
Many people mistake home equity lines of credit for home equity loans but the disparities couldn’t be clearer. An HELOC as it is commonly known is a type of revolving credit akin to a credit card. This means that terms and conditions for a home equity line of credit are flexible, unlike installment loans where home equity loans are categorized. For this loan, you have to follow fixed terms and conditions or risk negating your credit score. You get a large chunk of money once your home equity loan is approved but to access the rest, you need to wait for a new contract. The home equity line of credit can be utilized at any time as long as the client sticks within the limit. There are many differences between these two loans but there is a considerable likeness in that both are approved by assessing equity.