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When applying for a loan, the application process and the lender’s checklist can be mysterious. Most borrowers recognize that factors like credit history, salary, debts, assets and price of home will play a part in whether you are approved or denied.

How do all these factors come together? What can applicants do to make sure they have the strongest chance at a mortgage, home equity loan, second mortgage or other financial products that are available?

Be Honest with Yourself About your Strength as a Candidate

Above all else, go into an application process understanding where your weaknesses might reside. If you don’t have a full-time job or you have a weak credit score or you have a large amount of consumer debt—these are all things you must speak to and rectify.

What do Lenders want to see in an Application?

Lenders want the process to be as clear and transparent as possible. They want to attract the right type of borrower, which means one that carries the least amount of risk.

At the top of the list, they want an applicant with a positive credit reputation, steady monthly income and one that can clearly demonstrate an ability to repay the loan.

Does it Matter Where the Money is Spent?

There are several variables that make a clear answer to this question murky.  If you are buying a home than the price and condition of the home matters, you might even be subjected to a home inspection.

If it is for home renovations, medical care or education, you usually don’t have to provide much further context.

Focus on these Parts of your Application 

To be a strong candidate, work towards bettering your credit score and ensuring you have some assets to your name. While these are easier said than done, small improvements in both can lead to a greater chance at approval.

For second mortgages and home equity loans, the more equity you own in your home, the more funds a lender can provide to you.

Applying for loans of all types can be complicated. The more boxes you check off, the more likely you are to receive exactly what you want with appealing terms.

IS IT DIFFICULT TO GET A HOME EQUITY LOAN in 2020?
A home equity loan is a great way to borrow against the equity you’ve built up in your home. Against the backdrop of a robust Canadian housing market and near record-low interest rates, it continues to be an excellent time for property owners to consider taking out a home equity loan.

Common Myths about Home Equity Loans
There are many misconceptions about what a home equity loan is and how it can be used.

Myth #1: A Home Equity Loan and Home Equity Line of Credit Are the Same
A home equity loan and home equity line of credit (HELOC) might sound alike, but they are very different financial products, even though they both use the equity you’ve built up in the property.

For starters, “home equity” is the difference between the value of your home and the remaining balance on the current mortgage—every time you make a mortgage payment, your home equity increases. Your home equity also increases as the value of your home increases.

A HELOC is a revolving line of credit that lets you borrow against the equity in your home. You can withdraw money when needed, and you only pay interest on the amount you borrow.

A home equity loan works like your primary mortgage and is sometimes referred to as a second mortgage. You receive a fixed amount that is payable over a predetermined period time with a fixed interest rate and set monthly payments. You start to pay interest on the entire amount as soon as you receive the home equity loan.

Myth #2: You Can Only Use a Home Equity Loan for Home Improvements
The money you secure for a home equity loan can be used for whatever you like. Many people take out a home equity loan for home improvements, but you could use the money to buy a second property, pay for a college education, consolidate debt, or anything else.

Myth #4: Approval Is Guaranteed
Just because you have a house does not mean you’re guaranteed to get a home equity loan. A lender might approve you for a certain amount, but they could back out of the home equity loan or renegotiate the terms after they take a closer look at your financial situation.

How Do You Get a Home Equity Loan?
The requirements for getting a home equity loan can vary depending on who the lender is. The bigger the lender (i.e. Canada’s big banks), the stricter the lending rules.

Canadalend Can Help You Get A Home Equity Loan Even If:

• - You are self-employed and cannot verify your income
• - Your credit history has weakened
• - You have taken on too much additional debt
• - The value of your house has dropped

Where there is a will, there is a way with Canadalend. We don’t let the small things get in the way of making sure you get the best mortgage product at the best price.

FAQ about Home Equity Loans

Q. Is It a Good Idea to Take Out a Home Equity Loan?
A. YES! There are many advantages to taking out a home equity loan. One of the most significant benefits is the lower interest rate. If you’re consolidating debt, credit cards can charge interest as high as 30%. A home equity loan will also have a lower interest rate compared to loans that are not backed up by the equity you’ve built up in your home.

Q. Can I Get a Home Equity Loan if I’m Unemployed or Have Unreliable Income?
A. YES! If you go to one of Canada’s big banks and ask for a home equity loan while unemployed or have unreliable income, chances are you’ll get turned down. Even if you are self-employed, the big banks can discriminate against you. But not at Canadalend. We specialize in working with the employed, self-employed, even client’s that are in-between jobs.

Q. Can I Get a Home Equity Loan with Bad Credit?
A. YES! Canadalend can help you.

We work with all incomes and credit scores to help secure home equity loans for our clients. There are many reasons why your credit can take a hit, and it’s not always your fault, but banks don’t care. Even if a traditional lender does offer you a home equity loan, they won’t be giving you their best rates.

The same thing applies if you have declared bankruptcy and want to take out a home equity loan. Traditional lenders see you as being a risk and could charge you a premium for a home equity loan, but not at Canadalend.

Q. Is it true that Canadalend has access to more lenders and more products than any bank or financial institution?
YES! Canadalend has access to private and alternative lenders, banks that specialize in providing home equity loans, and even caters to those who are self-employed, have unreliable income, or bad credit.

Private lenders do not have to follow the same strict lending guideless that Canada’s big banks and trust companies do. Unlike big banks, private lenders provide you with more freedom, flexibility, and options. At Canadalend.com, we have access to hundreds of different lenders. That means we can find you a lender that will provide a home equity loan.

It’s your equity, and you should be able to take out a home equity loan on your terms. If you’re a homeowner and are looking to take out a home equity loan, contact Canadalend.com today or apply online. A Canadalend.com lending specialist will help you set up an appointment for a free personal consultation at your earliest convenience.

Apply online in 60 seconds & get approved now!
Call us for more information 905-881-0242
Canadalend.com, Helping Homeowners Get a Home Equity Loan

Flipping houses is a popular real estate investment, where the investor buys the home with the goal of quickly reselling it for profit. Often, they make improvements to the property to maximize its value.

Flipping houses in the GTA real estate market can be a smart investment and a positive experience if the investor knows what they’re doing. The biggest aspect that many don’t consider are the tax implications that come with flipping a property.

How to Flip a House

There are different ways that one can go about this. Some prefer to hold onto the mortgage for the shortest amount of time possible by flipping them as soon as the market heats up. They might not maximize value but they should yield a profit.

Other investors play the longer game where they invest in the property through renovations and improvements. This can result in a greater return on investment but it means the investor will be responsible for the mortgage for longer, and must finance the renovations. A greater financial commitment can lead to a much greater reward.

What’s the Risk?

There is risk with any investment. Each property comes with some problems, which could affect how quickly the house can be sold. In addition, markets fluctuate fast and if it happens to cool before an investor can resell the property they could have to financially carry it for longer. This could reduce the profit margin.

Any unexpected delays in renovations or construction could also result in less profit.

Restrictions and Tax Implications

When the GTA market heats up, one suggestion to cool the rising prices is to tax house flippers. This would impede speculative purchases and allow more residents to buy a home. Restrictions and tax implications could hinder some investment opportunities, but in conjunction with the new mortgage rules could protect borrowers, lenders and investors.

Another idea being considered is a graduated tax system. This means that an owner who buys and sells a home shortly after purchase would pay a higher tax rate.

These ideas do come with the contrarian viewpoint that it would take value and money out of the market, driving down the price of homes.

Flipping a home isn’t for everyone, but savvy investors who understand a specific market could yield a huge return.

When your finances do not measure up to the standard requirements of being pre-approved for a mortgage, some people may not know where to turn. Acquiring bad credit can be detrimental to various aspects of your life, but especially when striving to obtain a home equity loan.

Although individuals with bad credit may not qualify to go the traditional route with a large bank, there are mortgage brokers, financial institutions and private lenders who work with people in these specific circumstances. They offer enhanced flexibility and freedom, in fact.

It is recommended to check your credit score before seeking a mortgage or home equity loan if you are worried that yours may be low; this can be done free of charge in Canada through TransUnion and Equifax, as well as some newer service companies like Mogo Mortgage and Borrowell. Someone with bad credit typically has a credit score below 600 out of a possible 900 (the lowest is 300).

While technically considered average, a score between 600 and 700 can be eligible for a bad credit mortgage if an individual has solid income sources—which is more difficult for those who work on commission or work for themselves, but still possible to determine a projection of how much you will make based on your averages.

A reputable lender can provide a bad credit mortgage or home equity loan despite their client having a lower credit score. However, it is equally important for that individual not to look far beyond one’s means for a home to avoid being unable to make mortgage or home equity loan payments moving forward.

Someone with bad credit must have solid approval of their property to assure it is in average to good condition. Although individuals can still obtain a bad credit mortgage, they may be sanctioned with greater interest rates and extra fees from lenders and mortgage brokers as a result. Whether good or bad, a person’s credit is considered a direct reflection of how risky they are considered to loan money to.