Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Equity is an asset that your home accumulates as you pay down your mortgage. The amount of equity in your home is calculated by tallying up the estimated real estate value of your property and subtracting the balance remaining on your existing mortgage. Once you have at least 20% equity, you’ll be able to access a variety of credit products that are secured against it.
The most common way to access your home equity is through a second mortgage. The term “second mortgage” is used because the loan is second in priority in case of default. This means that if a borrower defaults, the first mortgage will be paid off before the second mortgage if the property is sold to pay off the debt.
When choosing to access your home equity via a second mortgage, you’ll have two products to choose from; a home equity loan or a home equity line of credit (HELOC).
A home equity loan is a lump sum of money that will be directly deposited into your bank account. The loan is of course secured by your home equity and will need to be repaid through installments, typically anywhere from five to fifteen years. Interest will be charged on the full loan amount.
A home equity line of credit (HELOC) functions more like a credit card, in that you’re able to withdraw from a revolving credit limit. You can choose to make minimum monthly payments or pay off your balance to regain access to your full limit. Typically, you will be able to borrow up to 85% of the value of your house. HELOC interest rates are usually variable and thus fluctuate based on an index. This will affect your monthly payments and make them less predictable than the payments associated with a home equity loan.
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.
The amount you can borrow can be calculated by taking the total value of your property multiplying it by the maximum borrowing amount and then minus the product by the mortgage left.
Home Value | $650,000 |
Maximum Borrowing Amount | 80% of home value |
Mortgage Left | $300,000 |
Amount You Can Borrow | $220,000 |
Although the idea of home equity may be confusing at first, it can be a huge commodity, considering all the ways you can use it to your advantage. In fact, most Canadian home buyers dip into their home equity at one point in order to:
Although using your home equity can help in many scenarios, it’s important to understand the potential benefits and drawbacks, as they can impact your lifestyle.
Borrowing using your home equity may seem like a complicated process but it is a great option for those consumers looking to access larger amounts or pay down high-interest debt. If you’re looking to dip into your home equity, don’t hesitate to contact Loans Canada, we can help match you with a third-party licensed specialist who can help you find the financing you need.
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.