If you’re interested in renovating your home or debt
consolidation, a home equity loan or line of credit for your Oakville home may
be the way to go.
Difference Between a
Home Equity Loan and a Home Equity Line of Credit
Home equity loans and home equity lines of credit both
provide cash based on the equity you’ve built in your Oakville home. Equity is
the difference between what you still owe on your mortgage and the current
market value for your home. The more of your mortgage you’ve paid off, the more
equity you’ve built in your home.
When you get a fixed-rate home equity loan, you get a lump
sum of cash to use however you want. Like most loans, it has to be paid back at
a fixed monthly rate over a fixed term. Your home equity loan interest rate is
fixed so you’re protected from any fluctuations in the market. If rates rise,
your rate remains the same. This lets you budget for a consistent payment each
month. A home equity loan means that the cash is yours once you sign the
papers. Unlike with a home equity line of credit, the bank can’t cancel
it or reduce the size of the funds available.
A home equity line of credit (HELOC) is almost like a credit
card. You have a limit and can take as much or as little as you like. Your
monthly payments vary, depending on how much you owe and the current interest
rate. A home
equity line of credit
offers some advantages over other loans. It lets you
draw money whenever you need it, at a much lower rate than your credit card.
With current credit card rates so high and lenders’ interest rates so low, you
can save over 20% in interest payments. If you’re looking for debt relief, a
home equity line of credit can let you consolidate your debt without incurring
the financial penalties that occur when you refinance your mortgage.
Advantages of an
Oakville Home Equity Loan
If you’re looking for money for a one-time expense, such as
a car or renovation project, a home equity loan is a good way to get a lower
rate than loans that don’t borrow against your Oakville home equity. It’s also
a good way to consolidate debt. By using equity in your home, you can get a
much lower interest rate than you will on a credit card or store credit card.
This lets you pay more towards the principal instead of paying off high
A home equity loan is also a great way to consolidate your
debt at low interest rates. Debt
can save you money on interest while combining multiple
monthly payments into one easy-to-manage and easy-to-track monthly payment.
A home equity loan based on the equity you’ve built in your
Oakville home gives you a stable influx of cash, so you can renovate, travel,
buy a car, or find debt relief.