Home Equity / HELOC | mmzfinancial

Home Equity & HELOC Mortgages

Home equity loan or home equity mortgage is a type of mortgage which uses the equity in your house as collateral for the mortgage. It can be used in many different ways to your advantage. Quite often it is used to finance large purchase or expenditure or to consolidate your current debts at low interest rate. It is possible to access up to 80% of your home equity with home equity mortgage.

Are you burdened with high interest credit card debt? By borrowing against your home equity you can lower your payments to manageable level and have some money left in the account at the end of the month just to save, pay down your mortgage faster or spend on self and family. By taking advantage of the low interest rates offered today you can cut your payments down to 10% - 15% of what you are paying now. Just imagine how much money you can keep to yourself.

Would like to help your kids with their tuition costs or maybe want to help them with downpayment on their first home but don't have the lump sum available? By taking out home equity loan you can still achieve your goals while keeping your expenditures low. The money can be available to you as soon as 24 hours in some cases and payments will not be sky high.

In general there are two ways to access the equity of your house available in Ontario:

Home Equity Loan
Home Equity Line of Credit (HELOC)

Let's take closer look at these options.

Home Equity Loan is one time lump sum loan, which is repaid over a set period of time at an agreed-upon interest rate. The payment and interest rate remain the same over the lifetime of the loan.

Home Equity Line of Credit or HELOC is a line of revolving credit with adjustable interest rate just like a regular line of credit would be but secured against the equity in your house. Borrowers are pre-approved for a certain amount and can withdraw money when they need it via special cheques or a credit card. Monthly payments vary based on the amount borrowed and the current interest rate. Like fixed-rate loans, the HELOC has a set term. When the end of the term is reached the outstanding loan amount must be repaid in full.

Home-equity loans can be valuable tools for responsible borrowers. Its low interest rate makes it a sensible alternative. Fixed-rate home-equity loans can help cover the cost of a single, large purchase, such a new roof on your home or an unexpected medical bill. And the HELOC provides a convenient way to cover short-term, recurring costs, such as the quarterly tuition for a four-year degree at a college.