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A Home Equity Loan in Waterloo Could Be What You Need

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All too often people will go without realizing the value their home holds as equity - value that can be used in the form of a home equity loan, Waterloo being an especially good place to use one, when one considers the presence of the university. Your home equity is the difference between the value of your home and the remaining balance of any liens on it, such as your mortgage. This value is not something that can be used on its own, but can be tapped through lenders, mortgage brokers or banks - this is what a home equity loan is.

Closed End Home Equity Loans

Sometimes referred to as a second mortgage, a closed end home equity loan takes the form of a lump sum loan with a fixed interest rate which is typically fairly low compared to other loans. These loans are often taken to invest into other endeavours that have a high cost, but a substantial return, using the value of your home equity to create more value and grow your assets. These investments can be anything from home renovations or repairs to college and university tuition funds to direct investments into a business you wish to start.
Another reason some people take a home equity loan is to consolidate their debts, paying off debts and instead turning it all into one contained, easy to manage loan with a lower interest rate. This is one way one can more easily erase debts and get a clean slate. Some mortgage brokers may offer home equity loans with a specific purpose of debt consolidation, or even specifically target their home equity loans to the purposes of debt consolidation.

Open End Home Equity Loans

The other side of the coin, otherwise known as a Home Equity Line of Credit (HELOCs), is the open-end home equity loan. A HELOC works like a credit card balance against your home equity, with an adjustable interest rate that is far lower than that of a real credit card. A HELOC can be a good use of your home equity if your needs are less slanted towards an immediate cash infusion and more towards a steady source of money for smaller things. Without the exorbitant interest rates that come with credit cards, it is easier and less stressful to pay off the balance of a HELOC. However, depending on the Waterloo mortgage broker or bank you speak to, they will often require a good existing credit score.

A Shift in Your Finances

By unlocking your home’s potential through a home equity loan in Waterloo, you can drastically change the way your finances work - either making money using your home’s trapped value or making your way out of a financially difficult situation. The advantages of using this trapped value are noticeable, and can make your financial life more comfortable and less stressful if used wisely. Depending on the mortgage broker or bank, you may even be offered a free appraisal to see if you qualify and if a home equity loan is the right option for you.


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