What is a home equity loan?
A home equity loan is just that, a loan that is backed by the equity in your home. The equity in your home is simply the difference between the market price (what you could reasonably sell it for in a fair market transaction) and how much you owe on it (the existing size of your mortgage).
What is the purpose of a home equity loan?
At its heart, a home equity loan is a conversion of your wealth from a form you can’t spend to one that you can. If your house is worth a lot more than you owe on it, that’s great – but the grocery store doesn’t accept equity.
Better Option Mortgage allows you to access the hard earned savings you have put in your home so that you can put it to more productive uses.
Why would I want a home equity loan?
There are a multitude of reasons. As we have said, a home equity loan converts savings you can’t spend to savings that you can. Building equity in your home is a great way to save and it is the primary avenue of savings for many Canadians. However, it is a long term strategy that does not always fit with life’s short term changes.
The money in your home can be used for:
- Debt Reduction
- Home Renovations
- Small Business Loans
- Paying Off Back Taxes
- Initial purchases
- Or a long overdue family vacation
What is Private Lending?
Private lending is simply the act of lending when the lender is not a bank.
Many of the same mortgage services are available from a private lender but they are more flexible than a bank when it comes to underwriting policies and can thus lend to a broader range of clients.
Perhaps most importantly, considering a private lender does not exclude you from the services of a bank. We can place you with whatever loan is best for you. This could be a private loan or it could be a mortgage from a traditional bank.
Why would I use a private lender?
Major banks are governed by overly restrictive lending guidelines. At Better Option Mortgage we can provide a wider range of loan products.
We can arrange all of the traditional mortgage products through your bank or we can also offer a number of private loan products.
Private loans can be short or long term, they can be interest only or amortized. They are designed to be as flexible as possible.
Is private lending right for me if I am self-employed?
Private lending is ideal for self-employed Canadians.
Typically, a major bank will only give you a loan up to a maximum of 65% LTV. However, you can still buy your home with just 20% down by topping up your traditional bank mortgage with a loan from Better Option Mortgage.
What is a second mortgage?
If you are taking out a home equity loan and you have an existing mortgage, then that home equity loan is a second mortgage. It allows you to finance investments, consolidate debt, repair your credit, renovate your home, or go on a family vacation.
What is LTV?
LTV stands for Loan-to-Value. It is the amount you owe on your home divided by its market value.
What if my credit score sucks?
Not to worry. Our loans are based on the equity you have accumulated in your home, so less than perfect credit ratings are not a hindrance.
Can I complete this application from the comfort of my own home?
Absolutely! The process is fast and simple and we handle almost all of the work. You can start the process now with our easy, no obligation, online application form. Of course, you can always just give us a call to ask us any questions you have and to see how we can help. We look forward to hearing from you.
If I am in debt, how does another loan help?
This is a common question. The key here is the number of loans you have and the balances of those loans. Consumer debt charges interest rates that can be oppressively high, making the prospect of paying off your debt seem unobtainable.
The key to a home equity loan is that you pay down your consumer debt, thereby changing the composition of your debt and lowering your monthly interest payments. This frees up more money to go straight to debt reduction. This process lets you improve your credit rating which will eventually allow you to secure an even lower interest rate.
Will debt consolidation hurt my credit rating?
No. Debt consolidation will not hurt your credit rating. Quite the opposite in fact – our debt consolidation process is designed to improve your credit rating.
How does the debt consolidation process work?
In broad strokes, debt consolidation is just transferring your debts into a lower interest loan. This lets you lower your interest payments, increase your principal payments, reduce your debt faster, raise your credit rating, and consolidate again…all without increasing your monthly payments.
This last part is critical and is the true strength of the process. You do all of this without increasing your monthly payment. In fact, your monthly payments are drastically reduced to one manageable payment.
How is this possible? Simple. There are people that are willing to lend you money at lower interest rates than your credit cards. That’s it.
Why should I consider a home renovation loan?
Renovations can increase the value of your property and improve the quality of life for you and your family. A well chosen renovation is a good investment in your home and your life. If you have been thinking about renovating your home but are not sure how best to finance it, give us a call and we would be happy to help.
Are there any upfront or hidden fees?
Never. The fees we provide to you in the Disclosure to Borrower at the time of signing are the fees you will pay at time of closing. We never add fees or charge an upfront fee. All fees are deducted when the transaction closes. It must be noted that legal fees, should you need a lawyer to close on the transaction, are always estimated as we have no control over what a lawyer will charge.
I am already talking to another broker/lender. Is it too late to see what you have to offer?
Absolutely not! Borrowing a large sum of money is an important decision and you owe it to yourself to shop around for the best deal. We will be happy to tell you if the other broker/lender is giving you a fair deal or if you should be considering other options.