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Home equity line of credit

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A Home Equity Line of Credit, or HELOC, is a type of credit line that gives homeowners the opportunity to secure the financing they need against the $ value of the difference between the remaining mortgage and the current price of the property. HELOC is a product generally used when homeowners need a line of credit with a low interest rate to pay for personal expenses, such as home renovations, student tuition, debt consolidation, or other financial and budgetary needs.

Some people use a Home Equity Line of Credit as an alternative to a construction loan, or a private mortgage. With enough equity in your home, HELOC can potentially unlock a large amount of purchasing power which could be used towards large purchases and investments in other properties and business ventures.

Another benefit of a HELOC is that it is an open loan, meaning that it could be used at any time, and it could be paid off at any time. Moreover, it tends to have lower interest rates than most revolving accounts such as personal bank loans and credit cards. It offers high credit limits, low fees and flexible repayment options.

Furthermore, if the borrower qualifies for a HELOC, it can also be a better alternative to an Open Mortgage, because after paying off a Home Equity Line of Credit, there is no need to close it. That way the borrower has the option to make use of this borrowing power again and again.

Know the Risks and Rewards of a Home Equity Line of Credit

Find a Mortgage Broker – Vaughan, Richmond Hill, Toronto & Beyond

A Home Equity Line of Credit, or HELOC, is a type of credit line that gives homeowners the opportunity to secure the financing they need against the $ value of the difference between the remaining mortgage and the current price of the property. HELOC is a product generally used when homeowners need a line of credit with a low interest rate to pay for personal expenses, such as home renovations, student tuition, debt consolidation, or other financial and budgetary needs.

Some people use a Home Equity Line of Credit as an alternative to a construction loan, or a private mortgage. With enough equity in your home, HELOC can potentially unlock a large amount of purchasing power which could be used towards large purchases and investments in other properties and business ventures.

Another benefit of a HELOC is that it is an open loan, meaning that it could be used at any time, and it could be paid off at any time. Moreover, it tends to have lower interest rates than most revolving accounts such as personal bank loans and credit cards. It offers high credit limits, low fees and flexible repayment options.

Furthermore, if the borrower qualifies for a HELOC, it can also be a better alternative to an Open Mortgage, because after paying off a Home Equity Line of Credit, there is no need to close it. That way the borrower has the option to make use of this borrowing power again and again.

Know the Risks and Rewards of a Home Equity Line of Credit

It is important to understand the risks associated with obtaining a home equity line of credit. The most important one is that you are putting up your home as a collateral. By doing this, you will make it easier for the lender to give you a larger credit line and a lower interest rate; however, if you were to ever default on your loan, your home would be in jeopardy. Unlike a credit card, which will ruin your credit if you do not pay it on time, an unpaid HELOC, same as an unpaid mortgage, could result in a bank foreclosure on your home.

To see if a home equity line of credit is right for you, click here for an over-easy Home Equity Line of Credit solution, and we will gladly assist you with your request.

If you ever have any questions regarding the mortgage process or about obtaining your first mortgage, we encourage you to contact us here by phone at 1-855-327-9079

 

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