Equity Line Of Credit Options

At one point or another, everyone needs to borrow money Whether
it’s for a new car, to renovate your home or to take that much
needed holiday
Borrowing money allows you to achieve things that just can not
wait If you are looking to borrow money these days, you need
not look far, especially if you are a homeowner with enough
equity in your home There are several borrowing options
available including a home equity line of credit Think of it as
having your own little bank
What exactly is a home equity line of credit? In simple terms, a
home equity line of credit is a form of a revolving credit
backed by the portion of the home’s value that you own outright
The equity in your home acts as the security for your line of
credit reducing the risk to the lender; in return, the lender
may be able to offer more favourable terms
For example, the interest rate is usually lower than rates for
other types of credit Think of your home as your own little
bank By using the power of your home equity, you can help
secure the funds you need at a lower interest rate, and you can
get a lower interest rate to help you save on interest while you
borrow You can access up to 80% (amounts over 80% will incur
Lender Mortgage Insurance) of your home’s appraised value minus
any balance owed on the existing mortgage and any other
encumbrances on title
To illustrate, if you have a home with an appraised value of
$300,000, $100,000 outstanding on your mortgage and you want to
borrow up to 80% of your home’s value, you can access up to
$160,000:
There are many reasons for getting a secured line of credit For
some people, they use it for home improvements; for others, it’s
for major and everyday purchases
How do you know if it’s right for you? You should consider a
secured line of credit if you:
Have built equity in your home
Would like to use the equity in your home to your advantage by
securing a lower interest rate
Like the flexibility of an interest-only payment option or
paying as much as you want
Prefer a reusable source of credit
Want quick and easy access to your funds, ie cheques, branch,
ABM, telephone or online banking

Tags | borrowing, credit, existing, favourable, flexibility, improvements, insurance, mortgage, result