Sometimes, homeowners require cash for renovation, emergencies, and to consolidate debts as well. They can opt for Second mortgage or Refinance. Refinancing your mortgage gives you a hard time, if you break your mortgage between the term. You are also liable to pay hefty penalties from the banks.
A Second mortgage that does not require any penalty if mortgagors want to take out cash or want to switch. The Second mortgage has three different types, Home equity loans, Home equity line of credit (HELOC) and Piggyback loans, respectively. Today we would like to discuss about a Home equity line of credit (HELOC).
What is a HELOC?
A HELOC is a secured loan, where home is used as collateral. It is a revolving line of credit, you can borrow money, pay back, and borrow again up to a maximum credit limit. You can get access to up to 65% of your home’s value. Nowadays, lenders might lend if you have 80% equity in your home. Interest rates depend on the equity of your home, the more equity you have, the best HELOC interest rate you will get approved for.
How much amount you can get under a HELOC?
Let us say your home is appraised at $500,000 and your first mortgage is $200,000. Based on this scenario, you can get up to $200,000 ($500,000*80%-$200,000= $200,000).
Difference between a HELOC and a Credit Card-
Advantages of a HELOC-
• Renovate your house (Renovation increases your home value, and it may be beneficial in the long run if you are planning to sell your house).
• Funds for emergencies
• Consolidate your debts
• Pay for medical expenses
• Invest in education
• Travel, weddings, etc.
• Help to earn a good credit history
What documents do you need for a HELOC approval?
• Income proof
• Excellent credit history
• Job stability
• Enough equity (At least 80 %)
HELOC payments strategy and default consequences:
To pay for a HELOC loan, you have two options either to pay interest only or blended payments (mortgage principal + interest). If you are unable to pay the loan or default a HELOC, then the lender has the right to begin the foreclosure process. In other words, you can lose your home if you default in making payments. A professional mortgage broker in Mississauga can help you to get the best interest rates for HELOC and will also guide you through the whole process.
Why choose us-
As a leading Mortgage Brokerage, we have strong relations with multiple banks and numerous lenders. We work with Canada’s leading lenders to provide you a mortgage solution that fits your budget. Our mortgage and financing process is amazingly simple, we represent you and match you with the best suited mortgage as per your needs. This way we can guide you through this complicated process with our years of mortgage financing experience.
• We are dedicated and professional Accredited Mortgage Brokers in GTA.
• We are well trained and have experience in the mortgage financing field more than 10 years.
• We can shop around with different lenders to get you the best possible mortgage rates and conditions as well.
• We have different options for different income and credit level with access to number of private lenders to suit borrower’s needs.
We are a professional mortgage broker in GTA. We can help you secure a mortgage with best mortgage interest rates. We are located at 2896 Slough Street, Unit # 6, and Mississauga, ON L4T 1G3. Call MB Mortgages Inc. today at 905-458-6929/416-939-7131 for your queries or you can email us at: email@example.com or you can visit our website at www.mbmortgages.ca
The information provided in this blog post is intended to provide general information. You should consult with a mortgage professional to fully determine the scope of your situation. MB Mortgages shall not be held liable from usage of the information provided on this page. Individual situation may vary.