If you are looking to organize your finances, I am sure you have heard about home equity loans such as fixed rate mortgage, or home equity line of credit or HELOC. How is this any different from other mortgage or private mortgages that are available?
Home-Equity Line of Credit (HELOC) is more of a variable rate loan where borrowers get a pre-approved amount with a spending limit that they withdraw as per requirement via a credit card or cheques.
Advantages Of HELOC
Some of the key advantages of home equity loans include:
- This is by far the most cost-effective method to cut down the overall cost of borrowing;
- The rate of interest on home equity loans and lines of credit are significantly lower;
- Compared to many other types of loans, this provides relatively easy loans for unexpected expenses;
- It gives an individual more flexibility to incorporate additional home improvement measures if they so desire;
- Home equity loans can be applied to fund college tuition and other highly expensive costs apart from steps like home renovation and debt consolidation initiatives.
- This kind of loan option allows an individual to get a relatively higher amount of loan for the same security as compared to other forms of loan options available
Individuals can apply as much as 80% of the total value of the home in some cases across Canada. This is as per the rates fixed by the Royal Bank of Canada. For many, this would be a preferred way to consolidate their finances.
Another important aspect is given the current property rates and the valuation upsurge seen across Canada. This puts an individual in a good situation to ensure future expenses and cut down the relative uncertainty about how to fund for their future needs.
Making use of the equity or assets you have built is indeed one of the smartest ways if you need a loan. Check out the best mortgage rates for a HELOC now and start saving.