Improving one’s financial situation is usually the farthest thing from a person’s mind whenever loans are mentioned, but not all loans are created equal. When you’re in a bind, having an emergency, or perhaps just out of luck, tapping into your home’s equity via a loan could help you out.
That’s where home equity loans come in!
But first, what is a home equity loan?
A home equity loan is a type of loan one can avail of against the value of the house one owns. The money from such a loan can be used to pay for emergency or extra medical expenses, needed house renovations or appliance upgrade, or for paying off tuition fees.
Although a home equity loan isn’t available in all parts of the world, the majority of developed nations have some form of it or another. It certainly is an option for you if you are from Canada and own your home.
Home Equity Loans in Toronto
There are two kinds of home equity loans that you can apply for if you’re from Toronto – Home Equity Line of Credit and Fixed-Rate Loans. These loans have become popular because of the type of advantages that they offer, namely:
- You will have the option of getting quite a huge amount of money depending on how much equity you have in your home.
- People with bad credit ratings are not excluded from those who can avail of a home equity loan.
- Compared to other types of loans, the interest rate usually applied to home equity loans are quite small.
- Payment can be tax-deductible.
There is one clincher to the advantages above…that is, if you fail to comply with the lender’s stipulations, then the lender will be free to sell your property. This is where mortgage professionals come in. They advise you on what you need to know so you won’t end up losing your home.
How to Get A Home Equity Loan The Smart Way
There are a number of lenders as well as mortgage companies that can help you apply for and get a home equity loan. The challenge lies in finding mortgage professionals that care about you and lenders who are not out to take advantage of your dire financial situation.
It would be best to do a bit of research before settling for a lender or a lending brokerage to help you out. Take note that some will not have your best interests at heart and will exploit you.
You may try for a second mortgage or go for a home equity loan line of credit depending on which one is more convenient for you to pay off and will meet your current financial situation.
Remember that what may seem like a great deal now can be tomorrow’s burden so plan wisely. Think of your financial situation a few months and a few years down the road, and make the best decision for yourself, not based on what someone else wants you to do.