Home Equity Loans
Primarily there are two Different forms of home equity mortgages or loans, a fixed-term loan and a line of credit often referred to as a HELOC.
A home equity loan is a one-time lump sum of money that slowly gets paid back monthly with a fixed interest rate, while a HELOC is more flexible and provides you funds as you need them and you would pay it back as you would a credit card that is they have a revolving limit that is you use it and pay it as much times as you can. When getting approved for a home equity loan, financial institutions will approve your request up to a specific amount based on the remaining equity of your home as your equity in your home will act as collateral.
Home equity loans can be one of 3 products:
- Fixed Term or a variable term mortgage, amortized over a period
- A home equity line of credit (HELOC), it is a mortgage that can be used & repaid with the same flexibility of your typical credit card but with a much lower interest rate. It can be in the form of either a first or second mortgage depending upon personal requirement
- A private mortgage, it is an equity based mortgage from a private lender. Best part about these type of mortgage is lender just look at equity in property, no income, no credit is not a problem.
Although interest rates on a home equity loan are higher than on a first mortgage they are typically much lower than on a credit card. Please contact us to know more at 416-857-3738