Get a Home Equity Line of Credit
No matter how well you budget, Canadalend.com knows that sometimes, you get hit with unexpected expenses. If you own a home, one of the easiest ways to borrow money without high interest rates is with a home equity line of credit (HELOC).
A HELOC is a revolving line of credit that allows you to borrow money at a low interest rate using the equity you’ve built up in your home. Home equity is more than just the current market value of your home, minus the outstanding balance on the mortgage; it’s the total amount of ownership you’ve built up by paying down your mortgage and appreciation.
A HELOC allows you to re-borrow a portion of the equity you have built up. You can use the equity you’ve built up in your home on other needs: a vacation, home renovation, your car, debt consolidation, or even college tuition—anything. It’s your money, you can use it however you like.
Because a HELOC is secured to your home, it’s easy to apply for, and you only ever need to apply for a HELOC once. After an independent, licensed mortgage agent at Canadalend.com helps you get approved, you can tap into your home equity line of credit (HELOC) in Toronto and the surrounding area anytime you like and borrow as little or as much of the home equity line of credit as you want.
With a HELOC, you only need to repay the interest on what you’ve borrowed; that means you can repay the home equity loan as your own pace. Because it’s a revolving line of credit, as the balance decreases, the available credit limit increases, plus the credit limit can increase as the equity in your home grows.
Pros and Cons of Home Equity Loans
There are many benefits to getting a home equity line of credit in Toronto and the neighboring locations. For starters, the more equity you have in your home, the more credit becomes available. At the same time, the more you use, the less equity you have in your home.
HELOCs are a great low-cost source of liquidity that homeowners can use repeatedly. And at roughly 3.5%, HELOCs are typically the cheapest rate for an open loan. They also offer the lowest, most flexible repayment plan.
While the low-interest-rate environment is great for borrowing, it can also lead people to take on more debt; which could be difficult to pay off when interest rates rise. Alternatively, some may be tempted to simply pay the minimum, monthly interest payments, but in the long run, this method leaves you with a bigger mortgage on your home.
Because the rates on a HELOC are not fixed, they can either rise or fall in step with prime or at the discretion of the lender, even if the prime rate doesn’t change. Mortgage Lenders can also reduce your HELOC limit for any reason, regardless of your repayment history.
To find out if a home equity line of credit is right for you, contact your local independent, Canadalend.com agent today!