How Long Does It Take to Get a HELOC in Toronto?
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What Is a HELOC?
If you’re thinking of making improvements to your home, helping pay for your child’s post-secondary education, or hoping to pay down unexpected debt, a home equity line of credit (HELOC) is an easy and inexpensive way to borrow money.
What is a HELOC? A HELOC is like a revolving line of credit that is based on the difference between the value of your home and the unpaid balance on your current mortgage. You build up equity in your home every time you make a mortgage payment. You also build up equity when the value of your home increases.
Property values in the Greater Toronto Area (GTA) have been strong for years now. In July 2016, a record 9,989 homes were sold. The average selling price for all home types was up 16.6% year over year at $709,825.1
The price of a detached home in Toronto increased 20.7% to $1.2 million while the cost of a detached home in the “905” area was up 21.9% at $888,565. The value of a semi-detached home in Toronto climbed 19.5% in July to $855,881. If you have a semi-detached home in the 905 area, the value increased 17.9% to $588,947.
The point is that home prices continue to rise in the GTA, which means homeowners might have a lot more equity at their disposal than they think. They key to tapping the equity you’ve built up in your home depends on your qualifying for a HELOC first.
What is a HELOC? A HELOC is like a revolving line of credit that you tap into when needed. Rules set by the Federal Government limit the maximum amount of money available to 65% of a home’s appraised value. You can increase the amount borrowed on a HELOC to 80% if it’s combined with a regular mortgage.
With a HELOC you have to make minimum monthly payments against the amount borrowed. As you pay off the principle, the credit amount revolves and you can reuse it. On top of that, a HELOC limit can increase as the equity in the home grows.
What It Takes to Get a HELOC in Toronto
Because a HELOC is a variable-rate loan and interest rates are hovering near record lows, it’s a great time to consider a HELOC. How long does the HELOC pre-approval process take? Generally, it can take anywhere from a few hours to a few days.
But there are a number of factors that will dictate how long it takes to get a HELOC in Toronto . This includes the type of mortgage being applied for and the application and documentation you need to submit to the lender.
The approval process for a HELOC is a lot easier than applying for a first mortgage, that’s because you already own your home and have built up equity in the property. And the lender will be using the property as collateral for the HELOC.
Typically, all that you need for a HELOC is a home appraisal, verification of your income, and verification of the equity you’ve built up in your home.
Benefits of a HELOC
HELOCs are a popular financial vehicle for those in Toronto looking to update their homes, or pay off higher-interest debt or unexpected expenses. In fact, an estimated 2.15 million Canadian homeowners (22%) have a HELOC.2
Last year, Canadian homeowners tapped $14.0 billion worth of equity through HELOCs. The most common use for a HELOC was for debt consolidation and repayment ($20.8 billion), followed by home repairs or renovations ($13.5 billion), investing ($11.0 billion), purchases ($8.1 billion), and “other purposes” ($5.5 billion).
Canadalend.com, Helping Torontonians Tap Their Home Equity
Canadalend.com is the country’s leading provider of low-cost private financials solutions, helping those in Toronto access the equity they’ve built up with their homes with HELOC. Whether you need money to consolidate debt or pay for home improvements, one of the best ways to borrow money with a low interest rate is with a HELOC.
With the help of a licensed, independent Canadalend.com agent, homeowners can quickly determine how much equity they can access. Then they’ll find you the best HELOC with the best rates. That’s because the licensed, independent agents at Canadalend.com have access to hundreds of different lenders, many of whom specialize in providing HELOCs.
Once you’ve been approved for a HELOC, you can access the available credit whenever you need to. Best of all, you can repay your HELOC at your own pace. And, as your outstanding balance decreases, the available credit increases.
If you are interested in finding out more about a home equity line of credit or want to know what your mortgage options are, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.
Sources:
1. “GTA Realtors Release Monthly Resale Housing Market Figures,” Toronto Real Estate Board, August 4, 2016; http://www.trebhome.com/market_news/release_market_updates/news2016/nr_market_watch_0716.htm.
2. “Annual State of the Residential Mortgage Market in Canada,” Canadian Association of Accredited Mortgage Professionals, last accessed August 22, 2016; http://caamp.org/meloncms/media/Res_Mtge_Mkt_Fall%20Report%20Final.pdf.
