Get up to 95% Loan-to-Value ratio from your home equity with a HELOC hybrid mortgage!
A Home Equity Line of Credit (HELOC) is a loan that is solely based on the amount of equity built up in your home. Due to recent changes to Canada’s banking regulations, banks can no longer provide you with an 80 percent LTV ratio. This has now decreased to 65 percent. That’s where we come in, offering up to 95 percent LTV.
How to Apply for a Home Equity Line of Credit?
To apply for a HELOC, the application process is quite similar to that of a traditional mortgage:
- Provide income and tax statements
- Conduct a credit check for all applicants
- Get a professional home appraisal to determine your property value
FAQs about HELOC Mortgages
If your home equity total value is between 75 and 80 percent of your home’s current market value, then you’ll meet the preference for most lenders. Depending on your credit score and your ability to prove you can afford the monthly payments, the actual amount you may be limited.
There are four main types home equity borrowing:
- Cash-out refinance. Get a brand new mortgage that is more than your existing mortgage. Use your new mortgage to pay off your existing one, and use the rest of the money for anything you want.
- Home equity loan. Get a second mortgage and keep your existing mortgage.
- HELOC. Keep your existing mortgage, but gain more flexibility through this form of borrowing, when compared to other borrowing options
- Reverse Mortgages. If you are a senior, 62 years of age or older, apply for a reverse mortgage to borrow from your home equity.
If you have an okay credit score, and proof of income, you can use the equity acquired in your home to secure a loan to borrow money at a low interest rate, for any reason. A HELOC reduces the risk in the eyes of lenders, since it’s a ‘secure’ loan.
Here Are Some Other Reasons to Get a HELOC Mortgage
Due to the several reasons listed below, a HELOC loan is a very practical financing option:
- It’s a flexible loan
- Use the money for home renovations or startup costs for a new business venture
- Fund yours your your children’s education
- Consolidate other high-interest debts
- Don’t pay interest right away.
- Open-ended loans, access or withdraw funds as you need them
- Pay of your expenses and borrow again
- Make payments on your principle amount at your leisure
To learn more about how a HELOC can work for you, speak to our mortgage team. Book a free consultation here on our website, or call us at (416) 621-1300.