Is it good to borrow home equity loan?

 

A home equity loan is a loan which is borrowable against equity. In the financial terms equity is an asset that may have liabilities or debts attached to it. Equity is calculated after subtracting these liabilities from the actual value of a said asset. Equity loan is actually a second loan or mortgage or known as home equity installment loan. Home equity loans Canada can be availed on both residential and non-residential properties. The value of the property is calculated on the present market value and the loan can be availed for any purpose. It is important for you to understand what an equity loan is so you can apply for it as an informed choice. The loan is good if it is going to be used for the purpose of increasing the value of the home or build equity.

Excellent credit history is necessary to avail a home equity loan and bad history may reject your loan application.

Home equity loan types

There are 2 types of home equity loan available and they are

·         Fixed rate equity loan

·         Home equity line of credit

Fixed

An individual will get a lump-sum onetime payment in this type of loan. The borrower can repay the loan over a fixed period of time with interest that is agreed. The interest rate for the loan will remain the same despite market fluctuations.   

Home Equity Line of Credit

(HELOC) Home Equity Line of Credit is a loan which works like credit card. This loan allows you to withdraw part of pre-approved sum of amount usually offered by banks. Loan may be given to borrowed as a bundled package which you can withdraw using a credit card provided by the bank or through checks.

The monthly repayment will depend on the loan amount borrowed and the interest rate agreed upon. You could also draw the amount you have paid. Entire loan amount has to be settled within the loan tenure.  You could also generate loan through refinancing and find a refinancing Montreal services such as Mortgage Montreal, a top mortgage service provider in Montreal and you can get in touch with them on phone number 514-823-8546 or by email info@mortgagesmontreal.ca.  

 

Comments

Post a Comment

Popular posts from this blog

Your Best and most Authentic Home Refinancing Company in Canada

Image
You want a refinancing service. However, you want to avoid any hustle during the process. So, we enter to make your mortgage refinancing  in Canada  easy and quick. We are a reputed mortgage service provider in Canada, offering the best mortgage services. Our company offers a wide range of mortgage options available at various interest rates and terms. We have collaborated with multiple lenders so that our customers have multiple options. If you want Canada's best and most reliable refinancing service, consider our company.  Our firm is one of the best  mortgage refinancing Canada .  We believe in offering the best financial solutions to all our clients. Our professionals have complete knowledge about all mortgages and offer the best solutions. In this blog, we will discover the advantages of mortgage refinancing.  Mortgage refinancing is when a bank or any money lending institution helps you replace your current loan with a new mortgage. It offers multip...
Read more

What do you need to know about home equity loan?

Image
Home equity loan is a second mortgage loan. Here we list the factors governing the loan so it helps you in getting home equity loans Canada .   When you are still burdened with a mortgage loan you can still borrow money from the same mortgage in the form of home equity loan. The loan provider will let you borrow more money if the value of your home is more than the loan amount. It is a secured loan because you have kept your home property as collateral. It is one of the simplest ways to get loan even when you have not completed the term of the first loan. The home equity loan can provide you monetary support for special needs and occasions like higher study for daughter, capital needed for business promotion, or finance required for home improvement and more. The borrowed money can be used for any special purpose and there is no restriction levied by the bank otherwise. However a home equity loan can be hazardous when you use your home property as collateral or guarantee. The money...
Read more

Why is a home equity loan a better loan than other secured loans?

Image
  Getting a refinance on your first mortgage is a routine affair if you want to stick with your current lender. Most owners go for a remortgage owing to various purposes involving the investment of money on other projects, such as resolving old debts, using it for expensive medical treatments, or putting the money on the mortgage property to increase equity. If you compare other loans, like personal or business loans, equity loans are faster to process because they are secured loans with your home serving as collateral. The Home Equity Loans Canada processing is not so intricate, and it will be a smooth transaction between the lender and borrower. If the borrower fails to make payments, the lender has the right to repossess the property and collect the loan amount. Compared to other secured loans, home equity loans are typically authorised faster. With the property’s share serving as collateral, the lenders are safe here. Therefore, they don’t need a lot of intricate processing....
Read more