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.
Line of Credit: A Summary
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.
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:
- 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.
- 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.
- 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.
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.
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!