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Why You Should Take Out a Home Equity Loan on Your Richmond Hill Home

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If you’re interested in debt consolidation and are looking for lower interest rates, you should consider a home equity loan with your Richmond Hill home.

Home Equity Loans

If you’ve been paying your mortgage for years, there should be a significant difference between the amount left on your mortgage and the market value of your house. This amount is called equity. Given the significant increase in real estate value in Richmond Hill, this could mean you are hundreds of thousands of dollars richer than you think.
Home equity loans use the borrower’s home as collateral. Borrowing against the equity in your home means that you can get a lower interest rate than most loans offer. The bank will give you a set amount of money that you pay back in fixed monthly payments for an agreed-upon term. Once the bank gives you the money, you can use it to pay off your debts.
Home equity lines of credit are similar since they draw from the equity of your Richmond Hill home. The difference is, the line of credit is like a credit card – you can take out more money when you need it. This comes with drawbacks since the interest rate is tied to the central bank’s prime rate and will rise with it. Also, the bank may lower the maximum for a line of credit or cancel it with little notice.
A home equity loan may be easier to deal with if you’re uncertain about the temptation involved with a line of credit. If your goal is to reduce debt, not increase it, a fixed loan may be the right choice for you.

The Benefits of a Richmond Hill Home Equity Loan

If you don’t have much debt, a home equity loan can help you reach goals. You can use it to renovate your home or purchase a new car. You can go on vacation or finance a child’s education.
A home equity loan has a much lower interest rate than your credit cards or store credit cards. There may be a difference as great as 20% or 25% with current low interest rates.
Debt consolidation is a popular reason for home equity loans. When you combine your debts into one loan, you often end up with a lower monthly payment. This lets you put more towards the principal, paying it off faster. Or if you need extra money to pay your bills, you can use the extra cash to pay expenses. With only one monthly payment to track instead of three or four, it’s easier to manage your budget.
Home equity loans are a convenient way to access your personal wealth if you come up against unexpected financial hardship due to illness, injury, or job loss. You can even use a home equity loan to pay off your tax bill if you’re found in arrears. If you’re coming up short at the end of each month, consider a home equity loan on your Richmond Hill home, so you can make your payments at a lower, more manageable interest rate.


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