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Getting a Home Equity Line of Credit (HOLEC)in Brampton
A home equity line of credit is simply the amount of equity that has been built on your home from your primary mortgage. To simply put, it’s a secured form of credit that you can use for home renovations or if you are in need of urgent cash. It usually has a much lower interest rate than a traditional line of credit and in Canada, it cannot go over 65% of your home’s value.
You may ask what is the advantage of a HOLEC? Well, it’s a revolving credit – which means you can borrow this money, pay it back and borrow it again if you need. Get in touch with the mortgage experts at Mortgage Power Canada to know more about the home equity line of credit in Brampton.
Types of Home Equity Line of Credit Services You can Find in Brampton
There are basically two types of home equity line of credit you can get – HOLEC combined with a mortgage and a stand-alone one. Let’s get into understanding each of them in detail:
Home equity combined with a mortgage or a readvanceable mortgage is combining a HOLEC with a fixed term mortgage. Unlike a normal HOLEC, you will have fixed regular payments and interest rates based on a schedule.
A stand-alone home equity line of credit is simply a revolving line of credit guaranteed by your home. The maximum credit limit for this type of HOLEC is 65% of your home’s value and it won’t increase as you pay down your mortgage principal.
The Benefits and Disadvantages of a Home Equity Line of Credit
Why you should get a home equity line of credit:
Lower interest rates
Easy availability of credit
Interest is issued only on the amount you borrow
No prepayment penalty
Flexible and can be set to fit your borrowing needs
Why you should get a home equity line of credit:
You’re getting access to a large amount of money, which can lead to more spending and more debt
Switching your mortgage to another lender will be difficult and you’ll be asked to pay off the home equity line of credit as a whole
If you miss payments, you can lose your home
Understand Home Equity Line of Credit With Us
We at Mortgage Power Canada understand how all these can be confusing to you and that’s exactly why we are here to help you. Our experienced and professional team will help you throughout the process of getting a home equity line of credit in Brampton and you can ask us any question you have and we will be ready to explain things to you how many times you need. We will help you in getting customized plans that will fit your needs and budget.