Home equity loans are offered by private lenders who are not limited by the same rules that cause banks to refuse loan applications by people with poor credit scores. Home equity lenders provide credit based on home equity which borrowers might have even with a credit score that wouldn’t appease traditional lending institutions. We are a seasoned team of experts with many years of experience extending home equity loans in Woodstock, ON.
Interest Rates and Payment Conditions for Home Equity Loans
Home equity loans have different terms and conditions from normal mortgages by institutional lenders. They are typically a first or second mortgage on a property that is lent at 7%-15% interest to be paid in a period of 12 months. The interest rates are quite high and the terms rather strict but it doesn’t deter people from taking this loan which is more flexible than other loan types. With assistance from our loan officers, it is possible to customize a home equity in Woodstock to your preferences.
Tailored Home Equity Loans
- Custom Draw Mortgage: Our organization can pay your contractors to finish your project without a hitch.
- Interest Only Mortgage: This loan’s principal remains as only interest is demanded.
- Blanket Mortgage: As the name implies, this is a loan covered by multiple properties. Lenders looking to secure more funding from the same lender often choose blanket mortgages.
People have unique needs that result in numerous types of tailored home equity loans. Our loan officers are ready to listen to all your wishes and work them into the mortgage agreement to ensure total satisfaction,
How Much Will You Receive
It is encouraging that lenders do not mind your credit score when making approval decisions but don’t rest easy yet. Home equity lenders are in the real estate business and must, therefore, ensure that the property presented as security is worthy. This is done by subtracting total debts from the price of property to gauge its equity. Once this is established lenders go ahead to calculate a metric called loan to value ratio, that helps them decide exactly how much to offer as a home equity loan. Our home equity lenders in Woodstock generally loan up to 85% LTV on the property, as any value higher than that signals a huge risk to bear.
If your application is approved, the lender offers reasonable amounts that you can use to fulfill your financial goals.
Ways How a Home Equity Loan is used
Borrowers know their needs best and it is not possible to restrict how this loan is used. Our home equity lenders have come across several uses for the money but the most common are renovations, education, debt payment, and business investing.
- Renovation: The money can be used to pay for important home repairs and improvements. Renovating a home is a great way to increase its value for when you need another loan or to put the property up for sale.
- Education: Your children don’t have to stay out of school as you can use the home equity loan to pay their school fees.
- Debt consolidation: Many people choose to pay off high-interest loans so they are left with one loan that won’t be such a hassle to manage.
- Business Investing: Home equity loan money is a great source of capital for entrepreneurs.
There as many uses for this money as there are unique needs among borrowers. You are free to spend it in any way as lenders are only interested in getting paid when the time comes.
Comparing Home Equity Loans and Home Equity Lines of Credit
Save for the fact that both are approved according to LTV, home equity loans and home equity lines of credit couldn’t be more different. As a revolving type of credit, the interest rates of an HELOC are flexible, unlike a home equity loan whose rates are fixed throughout the agreed term. Borrowers can withdraw the home equity loan at any time but without exceeding the set credit limit. For both loans, you need to present a property without overwhelming debts to show lenders that they will be compensated if you are unable or unwilling to pay.