Home Equity Line Of Credit in Canada
Home equity lines of credit (HELOCs) are a popular borrowing option for homeowners in Canada who need quick access to cash. As a type of mortgage, a HELOC enables you to borrow against the equity in your home, which is the difference between your home’s value and the amount you still owe on your mortgage.
HELOCs are a great lending tool that may just be what you have been looking for to round out your credit profile. It is important to know that not all HELOCs are created equal, so getting your mortgage advisor to guide you to the right HELOC product is key. For example, do you want a HELOC with a set borrowing limit that functions separately from your mortgage? This type of product is typically placed in the second position or is subordinate to your primary first mortgage. The lender for a second position HELOC is likely to charge a higher interest rate because of the subordinate position, which is considered to be a riskier position than a first mortgage registration.
Or you may be interested and well-suited to a HELOC / mortgage hybrid — these are specialty lending products. It is important to work with a qualified mortgage advisor who has experience in setting these loans up. They are often used as part of an investment leveraging strategy, commonly known as the Smith Manoeuvre. Lastly, if you’ve paid off your primary mortgage and have a clear title, you may wish to keep a HELOC in place, just as a safety measure, as a clear-title home is a prime target for title theft and fraud.
Getting Home Equity Line of Credit Mortgage
To be eligible for a HELOC, you must have a minimum of 20% down payment or equity. If you want to use a stand-alone HELOC as a mortgage substitute, the minimum down payment or equity required is 35%. Apart from the minimum down payment or equity, your lender will also require proof of an acceptable credit score, sufficient and stable income, and a reasonable debt-to-income ratio before approving you for a HELOC.
To get a home equity line of credit in Canada, you need to work with a lender who offers this type of mortgage. You’ll need to provide information about your income, credit history, and the value of your home. Based on this information, the lender will assess the loan and the amount of credit to extend.
Choosing the right mortgage company in Canada is a critical decision that requires careful consideration. It is important to opt for a reliable and trustworthy agent with a proven track record of providing excellent customer service. That’s why so many homeowners in Canada choose Enrich Mortgage Group.
Why Choose Enrich Mortgage Group
At Enrich Mortgage Group, we have a team of experienced mortgage professionals who will guide you through the entire process of obtaining a HELOC, from start to finish. Whether you need funds for home improvements, paying off debts, or accessing the equity in your home, we are committed to helping you find the best home equity mortgage in Canada that meets your needs.
If you’re looking to learn more about home equity line of credit rates or use home equity line of credit calculators, don’t hesitate to contact Enrich Mortgage Group today!