Home Equity Line of Credit (HELOC)
How a HELOC Provides a Structured Low-Interest Option
Canadians wonder what the best tool is to achieve their refinancing goals. A structured approach can be achieved with a Home Equity Line of Credit (HELOC). This is an ideal line of credit for Canadians who have already built-up equity from paying their mortgage for several years and home price appreciation. A HELOC, or a revolving line of credit, allows you to borrow against the value of your house at a low rate. You can gain access to a set dollar amount from your total mortgage. Simply take out a loan with a HELOC option. In this case, you will pay interest on the HELOC funds you utilize, separate from your regular mortgage payments.
Benefits of HELOCs
Convenient
With a HELOC, funds are instantly available through a revolving line of credit. HELOCs also allow you to borrow in smaller quantities, so you just borrow what you need – and when you need it. This can have significant convenience compared to home equity loans or mortgage refinances, which only allow for lump sum borrowing. Your monthly payments will be smaller. You will also be less prone to taking on too much debt when you borrow what you actually need.
Flexible & Efficient
You can cover large expenses easily with a HELOC. The money from a HELOC can be used for almost anything – such as travel, debt relief, education, renovations, and other expenses. You are not required to use the money for one purpose just because your house was the basis for it. HELOCs also allow flexibility in repayment options. Like a credit card, you can pay interest only payments for better cashflow or you can pay principal and interest payments, which would reduce the total amount owing.
Simple & Powerful
Through a HELOC, you can borrow up to 65% of the value of your property in Canada. The total outstanding mortgage loan plus your HELOC cannot exceed 80% of the value of your house. To see how much you can borrow, multiply the current market value of your home by 80%. After you subtract your mortgage balance, the remaining is the amount you can borrow – as long as it doesn’t exceed 65 percent of the value of your house. Simply divide the HELOC by the market value of your home to confirm.
Optimized Cash Flow
A HELOC does not need you to refinance your current mortgage, as it can be placed in 2nd position (behind your main mortgage). As a result, you have will have to make a monthly interest-only payment. You also reap the benefits of a lower interest rate in comparison to other loans. Interest-only payments are calculated on the basis of the total outstanding debt. This is deducted automatically from your bank account on the same day each month – similar to a conventional line of credit. This not only helps to manage variations in your cash flow, but increases monthly cash available for use. And you can pay off the total debt balance when you can afford to, rather than following a mandatory fixed payment schedule.
Why Choose Transparent Mortgages
At Transparent Mortgages, we offer a competitive HELOC to suit your needs. With full access to withdrawing funds and making payments at your leisure, we help you use the equity you already have to achieve your goals. What’s more, you can secure a great rate and get ahead in the face of any financial situation you find yourself in.
Key Attributes: |
Our HELOC Program Helps With: |
· Low interest rate · Pay interest-only payments or principal and interest – you choose · Tax deductible if funds are used for investment purposes · Can be placed in 2nd position behind your main mortgage · No requirement to payout your existing mortgage
A HELOC Makes Sense – Plan One Today
| · Debt consolidation · Home renovations · Emergency funds · Financial planning · Investments · Provide down payment for another property Very Low Interest-Only Payments |
Transparent Mortgages provides a HELOC that will make sense for you. Reach out to us anytime for inquiries and so we can provide you with incredible support for your borrowing goals.
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