Oakville Home Equity Loans

What are home equity loans or lines of credit?

Home owners that carry a mortgage loan on their house make monthly payments on their home, over a period of years. The amount of money that is left owing on the mortgage loan and the actual fair market value of the home is how ‘equity’ is derived, which basically means the dollar amount between these two amounts is how much ‘equity’ has grown in the home. Equity has monetary value that home owners can ‘borrow against’ or ‘borrow back’, and this is where Home Equity Loans come into the picture. Equity in a home grows each year, so it stands to reason that the longer it grows, the more value it will possess. Home owners sometimes have situations that crop up that requires a sizeable sum of money, and it is the equity in the home that attracts some home owners to borrow money in lieu of the grown equity.

How do home equity loans work?

Through a regular application process with a lender, Home Equity Loans is more simplified than other types of loans and the approval rate is higher because the home itself and its established equity is used as security or collateral against the Oakville Home Equity Loans. Home owner can decide how they want to use the Home Equity Loans funds, it does not necessarily need to be re-invested into the home like renovations or betterments, home owners can use the funds in any way. The Home Equity Loans can be taken in a one-time lump sum or as a line of credit if the home owner decides to only use a portion of the loan and not the full amount (the line of credit is an excellent resource of money for ‘a rainy day’).

When is taking out a home equity loan or line of credit makes sense?

There is something that has come up financially for a home owner that entertains the idea of Oakville Home Equity Loans and having the freedom to lean on equity in the home to obtain the appropriate funds is a big gainful impact! The more equity that has been grown in a home, the more money home owners can borrow, it is just that simple! The equity value and the borrowed value do not meet at 100% dollar for dollar, but home owners can access up to approximately 80% of their equity. Not having to take out another type of loan and having to go through the regular motions that are associated with other application processes is another personal, gainful impact.