Equity Take Outs (HELOC) Brampton
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Home Equity Line of Credit Brampton
What is Home Equity?
As a homeowner, you’ve probably heard the term home equity before, but do you really understand what it means? To put it in simple terms, home equity is the market value of a homeowner’s unencumbered interest in their property; in other words, the difference between the home’s market value and the outstanding balance on the property. As an example, if you have a home with a $100,000 mortgage and the appraised value of your home is $250,000, this would mean you have $150,000 worth of equity.
The equity you hold in your home can help if you are short on funds. If you have a special event or a major expense coming up, your home equity can be a way to help pay for it. Many homeowners in Brampton choose to utilize their available equity to help them with their short-term financial goals. The following circumstances are common reasons for wanting to use your home equity:
- Debt consolidation
- Second home
There are essentially two main ways to access your home equity, without selling your home. One method is to place a mortgage on your home in exchange for the funds that you require that fit within the guidelines of the financial institution or lender. These funds are lump sum amounts and the interest accrues on the total funds acquired from the date of closing.
How to access your home equity
If you’re thinking about using your home equity to pay for an upcoming expense, you’re probably wondering what the process is. Basically, there are two main ways to do this without selling your home:
1. Place a mortgage on your home
The first way to access your home equity is to place a mortgage on your home to get the funds you need that fit within the guidelines of the financial institution or lender. These funds are lump sum amounts and the interest accrues on the total funds acquired from the date of closing.
2. Home Equity Line of Credit (HELOC)
The second way to gain access to your home equity is with a Home Equity Line of Credit (HELOC). If you’re wondering what this means, a HELOC is a loan in which the lender agrees to lend a maximum amount within an agreed period. The collateral would be your equity in your house. A HELOC is different from other types of mortgages in that it isn’t a lump sum but allows you to access the funds when you need them. HELOCs hold some advantages: First, you have the freedom to pay back all or some of the loan at any time without penalties or limitations, and second, interest is paid on the outstanding balance of the loan and not the entire limit.
Let Canadian Mortgage Services Assist you with home equity services or home equity line of credit
Hopefully, you now have a better understanding of home equity take outs and home equity line of credits. Still have questions? Canadian Mortgage Services can provide the assistance you need. We can answer your questions and guide you in the right direction. If you’re looking for home equity services or a home equity line of credit in Brampton or you’re interested in learning more, you’ve come to the right place. Give us a call today and we’d be happy to assist you!
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