The type of loan secured by real estate is known as a home equity loan that is usually provided by private lenders. They extend a registered mortgage to willing borrowers but only after measuring equity. Property equity simply refers to its value minus the debts on it. This is an important assessment for home equity lenders who do not rely on credit scores to make lending decisions. Our team of loan experts has experience in providing home equity loans in Sarnia.
Payment Options and Conditions for Home Equity Loans in Sarnia
You will get a standard first or second open mortgage on the property that you can end at any time. The loan offered at 7%-15% interest must be repaid in one year and ending it early will cost you a fee of three months interest. Home equity loans may be more expensive but they are widely sought after by customers looking for more flexibility. Our loan officers can discuss your needs at any time in order to help you make a good choice.
Common Tailored Home Equity Loans Include:
- Construction Draw Mortgage – The contractors get paid until your project is complete to keep it from stalling.
- Blanket Mortgage – You can secure more financing by listing more than one property as security for the same loan.
- Interest Only Mortgage – Loan interest is paid but the principal is untouched.
More variations could be written into the mortgage agreement to suit your needs, which is why our experts in the city are always ready to listen and recommend the best options.
How Much Can you Borrow with a Home Equity Loan
The amount you will get is determined by the equity in your property. Lenders must calculate the risk you pose as a client in order for them to decide whether you deserve a loan and if so, how much they would be willing to lend. Loan to value helps lenders make this determination by dividing property debts by the appraised price. If that number is above 75%, home equity lenders will not approve an application. While the LTV is a major concern among private lenders, some also base their decision on job history and credit score. Home equity lenders give reasonable amounts to help Sarnia residents achieve their immediate financial obligations. You can use the loan to pay off expensive loans, pay your college fees, or even fund a business project.
Common Uses for Home Equity Loans
Lenders do not follow up on how the loan money is used, as the borrower knows best. This information is only required for record keeping and our company has come across several uses including; debt payment, bills, tuition and living expenses. There are people who want to use the equity in their assets to pay for luxuries like cars and idyllic vacations. Home equity loans can be used in countless ways which are why lenders leave clients to make spending decisions.
The home equity loans we offer in Sarnia can be used to help loved ones, pay emergency bills and stop foreclosures.
- Renovation – Many people seek loans to refurbish their homes for increased comfort or value addition.
- Debt Consolidation – The money is used to pay off high-interest loans before it becomes overwhelming.
- Education – You can pay school fees using home equity loans.
- Investing – Entrepreneurs often take loans to fund their ventures. The money can also be used as capital for startups.
Differences With Home Equity Loans and Home Equity Lines of Credit (HELOC)
An HELOC is like a credit card with variable rates unlike the home equity loan with its fixed rates. With a home equity loan, you will receive a lump sum of money. For an HELOC you can withdraw as much as you like when the need arises but staying within the credit limit. Whether you want a home equity line of credit or home equity loan, remember that approval decisions for both depend on equity. Some lenders may rely on other parameters to reach a conclusion but our loan officers in Sarnia are happy to help you find an appropriate, affordable option as long as you have enough equity.