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Home Equity Line of Credit Mississauga: What You Need to Know!

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Navigating the tremulous waters of home equity can seem as a daunting task and frankly rather scary. But, most homeowners do not realize just how beneficial such equity can be when applied to a home in Mississauga. Keep reading to learn about an opportunity to open a home equity line of credit may be a positive endeavor despite popular concern over maximum financing.

Equity Line of Credit: A Summary

First of all, it is a good idea to briefly summarize what home equity is when applied to a line of credit. An equity line of credit is characterized by an owner agreeing to receive the maximum amount of credit within a mortgage term where the collateral is the home itself. The home becomes an assurance to the financial institution that the loan will be paid back in full over time. Therefore, if the loan as well as interest is not consistently repaid, the lender has the right to foreclose the home, as it is an asset.

Benefits of Enrollment

Although the thought of putting your house on the line is intimidating, with proper advice and careful consideration, the move could be extremely valuable and could make life and expense management much easier. Here are the top three benefits of opening an equity line of credit:
  1. Consolidation of Debts: Consolidating your debt can make monthly payments more manageable. Consolidation forces all payments into one pool so that owners do not feel swamped or overwhelmed by credit owing. Interest rates on equity lines are fairly low and sometimes even tax deductible, making enrollment even more promising and financially lucrative.
  2. Improved Credit Score: Due to the easy and more stable nature of equity loan payments, credit score can be improved overtime. Experts also recommend always staying at or below 30 per cent of the credit lines allotted spending limit in order to keep your credit score in check.
  3. Lower Interest Rates: In general, a home equity credit line will carry a lower interest rate when compared to a standard loan or mortgage. One can find further information on interest rates in Canada by keeping up with the prime rate and contacting a consumer financing professional for trusted and current advice.

Rates and Trends

Approaching 2015, mortgage rates in Canada are continuing to be exceptionally low. The average variable rate for 2014 was 3.00 per cent. Fixed five year rates were slightly higher overall, sitting at approximately 4.91 per cent. Homeowners can easily compare mortgage rates between Canadian financial lenders online. It is wise to continually shop around and keep track of market fluctuation, as wise investors can jump on real-estate opportunities more often with guaranteed return on investment. A home equity line of credit will continue to enjoy the benefits of low interest rates similar to those of a mortgage, going into the new year.
Contact a credit specialist today to help you weigh the benefits of opening a home equity line of credit for you Mississauga property. Don't wait another day!


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