There are a wide variety of tools available for Canadians when they need a loan. Those options however become considerably more limited for those with less than perfect credit. If you are a home owner with bad credit but are in need of a loan, one option you still have available to you is a home equity line of credit.
Home equity lines of credit (sometimes referred to as HELOCs) are a way for home owners to leverage the equity that they have built up in their homes. When you apply for this type of loan, you can receive a lump sum of cash to use as you please.
The interest rate on this type of loan tends to be higher than that of a first mortgage, however the term is also shorter. A home equity line of credit can be a good way for people to consolidate higher interest debt, use for emergency expenses or even use for investing such as a down payment on a rental property.
With a home equity line of credit, it is possible to borrow up to 85% of the equity in your home even if you have bad credit. Even if you are in consumer proposal or have declared bankruptcy, you can still be approved.
This type of loan is a good option for those who are looking to repair their credit. Particularly if you have high interest consumer debt, a home equity line of credit is a tool you can use to help get yourself out of debt faster.
Is a home equity line of credit right for you?
While this type of loan can be a great tool, it may or may not be the best one for you. Depending on the renewal date and interest rates of your current mortgage, it sometimes makes more sense to refinance. To determine if a home equity line of credit or another strategy is best for you, you should sit down with your mortgage broker.
Contact Akal Mortgages today to learn more!
If you are interested in learning how you might benefit from a home equity loan, get in touch with one of Akal Mortgages advisors today. We can help show you how you can get access to the money you need, even if you have bad credit. Call us today at (416) 621-1300.
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