A home equity loan refers to a kind of loan given with real estate as loan security. These loans are given as mortgages registered on a property. To approve such loans, lenders rely on equity or simply the value of a home minus debts on it. This is different from a regular bank loan because credit and job history are considered as inferior to the amount of home equity. Our professional team has years of experience issuing home equity loans in Uxbridge and other parts of Ontario.
Payment Options and Stipulations for Home Equity Loans in Uxbridge
This is a standard one-year open first or second mortgage offered at interest rates between 7%-15%. An open mortgage is one that you can end early if you so wish, only having to pay three months interest as fine. Unlike traditional bank mortgages, it is possible to have our lenders customize a home equity loan to your needs. Our experts will speak to you about these to make sure you get a useful loan.
Common Custom Options Are:
- Interest Only Mortgage: The principal is unchanged, as a borrower only needs to pay interest.
- Blanket Mortgage: You can front more than one house as security for the same loan as you try to secure more financing.
- Construction Draw Mortgage: This is a loan you can use to pay construction contractors until the project is completed.
More custom additions can be included in the loan agreement. Our officers are happy to discuss your circumstances and recommend the options available to you.
How Much Can You Get with a Home Equity Loan
The amount extended to individuals depends on the equity available. To make a clear determination, home equity lenders have to calculate loan to value (LTV) ratio, a most important metric. It is obtained by dividing mortgages by the appraised value of a property. In so doing the lenders hope for a value that is below 75%. Our home equity lenders in Uxbridge are willing to loan up to 75% property LTV. This is the most important factor for a home equity lender in the city but; there are some who make decisions based on credit score and borrowers’ annual income.
Popular Uses for the Loan
The money you borrow with a home equity loan in Uxbridge can be used in any way the borrower feels like. It is used to invest in business, renovations, and education but it could be a great way to repay high-interest loans. On a less serious note, people use the loan money to pay for expensive cars or buy vacation packages. The use of your money is a personal agenda that home equity lenders cannot restrict.
- Renovations: Money for this purpose is used to repair or make improvements to a home.
- Education: Your children go to school and pay school fees using home equity loans.
- Business Investing: If you don’t have money to inject into your new business and are a property owner, you can use the home equity loan as a valid source of capital.
- Debt Consolidation: Pay off other debts using money from the home equity loan.
Our loans that we provide in Uxbridge have been put to less common uses like stopping a power of sale, helping family members, stopping a foreclosure, or seeking emergency treatment.
Discrepancies Between Home Equity Loans and Home Equity Lines of Credit
A home equity loan has several disparities with a home equity line of credit also known as an HELOC. The latter is a type of revolving credit with a flexible set of payment terms and interest. This is much unlike the home equity loan whose monthly fees must be paid in fixed installments. An HELOC borrower can take out any amount of money at any time it is needed as long as they stay within the credit limit. The only comparison between a home equity loan and home equity line of credit is that LTV is the deciding metric for approval. Our experienced loan officers are ready to help you make the most appropriate loan in Uxbridge, ON.