This is a loan which is secured by real estate and given by private lenders who are ready to overlook such things as credit score and job history. Equity is the value of a home minus the debts in it and it is the most important factor to a home equity lender. We have an experienced team of experts who have been offering home equity loans in Thornhill and other cities in Ontario.
Terms and Conditions for Home Equity Loans in Thornhill
This loan is, in reality, a standard open mortgage that you take for the first or second time on a property. It is given at 7%-15% interest for a period of 12 months. An open mortgage is one you are allowed to pay early if you can afford the penalty of three months interest fees. The rates are significantly higher than those of a regular bank mortgage but that doesn’t stop more people from applying for them.
These loans are flexible and may be customized according to each client’s needs. Our home equity lenders are always at hand to discuss any special interests and weave them into the mortgage agreement.
Common Custom Loan Choices Include:
- Construction Draw Mortgage: We pay your contractors to finish your project on time.
- Interest Only Mortgage: You should only pay interest without affecting principal.
- Blanket Mortgage: You can front multiple properties as security for the same loan.
Our lenders in the city understand that you have unique needs which they must include in a mortgage agreement. In the end, you will have a fully customized loan that you can afford to repay when the time comes.
How Much Can I Borrow with a Home Equity Loan in Thornhill
The amount a lender will extend to you depends on the equity in the property presented. They must calculate loan to value ratio, a metric that helps them define interest rates for different clients. The loan to value ratio of a property is obtained by dividing total mortgages by its appraised value. Our home equity lenders in Thornhill are willing to loan up to 75% LTV on a property. They charge high interest and require sufficient equity to leverage in case you are unable to repay on time. According to the mortgage act in Ontario, a holder of a registered mortgage may sell it off to claim their investment but that is not possible because lenders who came before must recoup before a home equity lender can be compensated.
How to Use the Home Equity Loan
Unlike banks, our home equity lenders do not dictate uses for the loan. They believe that a borrower knows best and therefore let them spend this loan in any way they want. Many people have serious uses for the money including paying debts, school fees, home renovations and business investing. On occasion, people need the money to buy a car or purchase vacation packages.
- Business Investing: Many people lack the funds to start a business but as a property owner the equity can be all you need to launch the venture.
- Education: The loan can be used as school fees for your children.
- Debt consolidation: The money can be used to repay other expensive loans. One debt is easy to keep up with compared to having several loans that you must pay each month.
- Renovation: Many people use the money to upgrade or repair the home and hopefully sell it at a higher price.
These loans are reasonable amounts that can be useful in actualizing clients’ financial obligations.
Differences Between a Home Equity Loan and Home Equity Line of Credit
There are clear differences between an HELOC and a home equity loan that unfortunately, clients do not notice. Approval based on home equity is the only similarity between these types of credit. A home equity loan is given to be paid back in fixed installments for a defined period but not a home equity line of credit. An HELOC is in the revolving credit category with flexible rates and terms of payment. You can access the line of credit any time you need it but never exceed the credit limit. You will get full assistance from our officers so that you end up with an affordable home equity loan in Thornhill.