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Timing is a tricky thing. When it comes to finances, it’s sometimes hard to know whether one should be proactive or reactive. There’s even a tendency to put things off until things have hit rock bottom or until every star has aligned.

This isn’t to say there’s a right way or a wrong way when it comes to taking on a loan or accumulating debt. These are big decisions and there’s quite a few variables to wade through.

Let’s look at some factors that should be considered when deciding if now is the right time to apply for a home equity loan.

Why do I need the Loan?

This might be the biggest question. You never want to take a loan or put your house up as collateral unless the reason is a good one. There are a ton of good reasons—medical emergency, business opportunity, home renovations.

If the reason feels legitimate then the timing is probably legitimate as well.

Will I get the Best Interest Rate and Repayment Plan?

It’s a simple question: will you get the best deal when you apply? If you believe that there’s a better interest rate around the corner or that you can improve your credit score, then the best advice might be too wait.

Timing isn’t just about what’s happening in your life. It’s also about what’s happening with the lender and if you can secure the best deal.

What if my Situation Changes?

If you need the money today but believe that your situation can change, then it still might make sense to borrow money against your home. In this case, the solution might be a home equity line of credit where the funds will be available to you. Like any line of credit, you only must pay back what you use so if your situation changes then no harm done.

Applying for loans is a big deal and the timing must be right. Be honest with your situation and logical and, most importantly, speak with a professional who can help guide you to the right decision.

If you have been reading this blog for some time, you have probably learned that there are some serious benefits to a home equity loan. Surprisingly, it’s still an avenue that many people have left untraveled. It might be the most proven yet underused way for homeowners to access money in times of need.

When you want a loan, most people have several options. Lines of credit, credit cards and even borrowing from someone they know. Each has benefits and drawbacks but none have the specific benefits of a home equity loan or line of credit.

A Home Equity Loan is like Enjoying the Perks of your Investment

For most, their home is their greatest asset. To be able to leverage your investment to access a loan is to leverage your own personal equity. The process comes with a greatest level of ease. For years, you pay your mortgage every month, so why not have it work for you when you need it? This is one of the benefits to purchasing instead of renting.

Since these are secured loans, approval is easier and you will be more trusted in the eyes of the lender.

A Home Equity Loan Allows you to Potentially Borrow More

The way a home equity loan works is you get to borrow against whatever you have invested into your home. If the value of your home is $500,000 and you’ve paid $200,000 of your mortgage, then you can borrow $200,000.

Not many loans give you access to that kind of money. Your home equity affords you greater borrowing ability.

You’ll Probably Enjoy a Lower Interest Rate

Home equity loans generally yield a lower interest rate, which means you can enjoy more of the money while you pay more towards the principle. With interest rates being the biggest detriment to borrowing, this is obviously a huge boon and should be a deciding factor.

There’s lots of options and each situation is different. Consider a home equity loan and see if it’s the best option for your life.

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

The challenges of having a mortgage extend far beyond just obtaining one in the first place. Monthly mortgage payments are non-negotiable and missing them can quickly put you in arrears. This means you owe money you simply should have paid out already. Tax arrears are similar in that you owe money to the government. However, both situations translate to putting yourself in significant financial trouble.

Mortgage Arrears

With a mortgage, your Ontario lender can take legal action to reclaim their money, pursuing what is called ‘power of sale’. This means you would be evicted from your home and they would sell it in order to get their money. From start to finish, that process could take an approximate period of three months.

Although you would receive any additional profits from the sale, you would incur the applicable power of sale fees and still be left without a home. You may stop the power of sale before it is carried out, but this requires help from a financial expert.

Tax Arrears

With taxes, the Canada Revenue Agency has the right to redirect your tax refunds or tax credit to pay off your debt. They may alternatively take action to garnish your wages, or even seize your property if needed—including your home, which they can sell at auction. You also incur the significant interest rates associated with tax arrears, making it even more unattractive to find yourself in this position.

Avoiding Arrears

Neglecting such significant payments as taxes or mortgage can result in other serious financial issues. When it comes to obtaining any loans, you may be forced to go through only a private lender. However, you may simply be forced to sell your property and pursue major debt solutions.

Obviously, it is best to make payments on your mortgage and taxes as quickly and efficiently as possible. If you find yourself struggling to keep up with these, however, it may be necessary to seek professional assistance from a financial expert. Tax or mortgage arrears are serious and can lead to additional hardship.