Are Home Equity Loans Hard to Apply for?

home equity loans in TorontoHome equity loans are a great way to get money out of your home when you need it. Like other types of financing, it all comes down to your application; this is where one of our Toronto mortgage brokers can help! There are so many nagging little details on a HEL application that can ruin your chances for getting a good amount and interest rate that you’re going to need help filling it out. We’ll help you fill it out, review it and go over any areas that look a little strange.

What is a Home Equity Loan?

Also known as a HEL (not to be confused with a HELOC), these types of loans take the equity out of your home; If you have $50,000 equity in your home, you can borrow up to 70% of this or $35,000 in this case. This is to keep you safe from becoming over extended and owning more debt than the home is actually worth. Your mortgage broker may be able to find you a lender who will lend you more than the standard 70%, but you’ll want to have a discussion to make sure you’re getting the right loan for you.

What Can a Home Equity Loan be Used For?

They can be used for virtually everything, but that doesn’t mean they should be. You’re going to want to be very careful about what you use your HEL for. Wise investments could be investing the money back into your home with repairs, or you could invest in continuing education. Basically anything you wouldn’t spend your savings on you will probably want to avoid spending a home equity loan on. If you’re not sure what a good investment would be for your loan, ask your mortgage broker.

One great investment would be paying off your bills with adebt consolidationplan. Before you do anything with the money, you’ll want to look around and see what bills you can pay off and clear out. Don’t borrow equity out of your home if it’s at a higher rate than what your current bills are at; this will just lead you down the garden path.

How Hard is it to Get a Home Equity Loan?

Getting the loan isn’t nearly as hard as most might think, but it really does start with the application. If you neglect anything the lenders will find a reason to up your interest rate or offer you a bad deal. Most will just skim the application; if they notice anything off into the bin it goes. If you want a home equity loan, let us help!

We’ll not only help you fill out the paperwork, we’ll help pair you with a fair and equitable lender. If your credit is not so great, we can recommend some steps you can take to improve your FICO score and get a better rate. Regardless of your needs, we’ll work hard to make sure you get the home equity loan you deserve.

Also, visit our home equity line of credit page today to learn more! http://www.homebasemortgages.ca/home-equity-loans/