Equity Loan
Equity Loan

Equity Loan

Being an equity the value of a piece of property over and above any mortgage or other liabilities relating to it, a home equity is the value or the portion of the property that you own in Canada.
So, when you need some extra money, you can ask your bank for an Home Equity Loan which can provide you with the financial resources you need to pay off debts or take on a major expense, like home improvements or tuition for you or your children.

Home equity loan is a kind of second mortgage against your property.
Your guarantee to pay it out and collateral is your equity that you own in your house.
In general the features of this equity loan contemplate a loan amount up to $125,000, a loan term from 181 to 264 months, a lower rate than most personal loans and credit cards.

The loan amount depends on many factors, including the amount of equity in your home and your current financial situation.
Typical equity loans in Canada allow you to borrow up to about 85% of the appraised value of your home.
You qualify for a home equity loan if: you are a resident of Canada, you have reached the age of majority in your province of residence, you own the ability to make monthly payments in order to pay off your equity loan.

You must also be the owner of the property securing the loan, and the property must be your primary home.
Interest rates are based on various factors, which include your income, credit score and payment history.
Imagine you need some cash all of a sudden (for renovation, education, medical bills, vacation, car, emergencies).
There are two types of home equity loan you can ask for.

The first one is a regular mortgage. You borrow a sum of money against the equity in your home and you need to pay it back.
The second one is like a credit line.
They give you a credit line and you can take as much money as you need up to your personal assigned sum.
When you get home equity line of credit, lenders give you a special type of card that you can use. You can pay it back when you can, partially or in full.
If you are unable to do it, the lenders will take your property away.

There are pros and cons Of Home Equity Mortgage.
If it's true that you can use it freely for renovation, debt consolidation, emergencies, vacations, that you can deduct taxes for home equity loans of up to $100.000 and, you can take advantage of lower interest rates than credit cards and car loans, you risk to lose your house if you donít pay.
Also in some situations, you can end up owing more than the value of your home.

Given many varieties of home equity products, it can be difficult to decide which option is best, so the thing to do is contacting accredited brokers who can help you navigate these complicated waters.
They can help small business owners or people with debt consolidation borrowing against the value of their homes.


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