Home Equity Lines of Credit in Barrie
A large benefit of homeownership is your ability to build equity over time. You can borrow against this equity in your Barrie property using mortgages or home equity lines of credit, HELOC for short. The key difference between these types of loans is that a mortgage is a lump-sum and a HELOC is a revolving line of credit that can be used like a credit card. The equity that you build from your property allows you to re-borrow a portion of funds and you can use those funds for many things.
Uses for Home Equity Lines of Credit
There are many uses for your HELOC. Perhaps you have some renovations that need to be done that require immediate attention or have an expansion planned. Second, maybe you want to consolidate debt and turn many small payments into a single more manageable payment. Third, perhaps someone in your family has got into a higher education program, and the home equity line of credit is a solution to help fund the tuition fees. Another option could be for the line of credit to be used to pay off personal loans. Its also important to consider whether you need a one time cash amount or if you plan to continue to borrow and pay off a credit line. If you only need a one-time cash amount, you’ll likely be better serviced with a mortgage from a brokerage that focuses on Barrie homes, like Mortgage Broker Store.
Key Details of A HELOC
Just remember that the HELOC is secured by your home and cannot exceed 65% of your home's value.
The Office of the Superintendent of Financial Institutions, (OSFI), states you can access no more than 65% of the total value. That means your HELOC can not be more than 80% of the total value of your property. So, as you pay off your mortgage and build equity in your home, a HELOC gives you the ability to reborrow a portion of these funds. So remember that key figure of 65% of your home's value.
Because the loans are secured against the value of your home, home equity loans offer extremely competitive interest rates that are close to those of most first mortgages. Compared to unsecured borrowing sources, like credit cards, you’ll be paying far less in financing fees for the same loan amount.
HomeTrust & Equityline Visa
While the major Canadian banks are the primary source of HELOCs, many people are turned down due to their strict approval criteria. Alternative lenders, such as HomeTrust can provide HELOCs to people who are turned away by their primary banks. HomeTrust offers its Equityline Visa which has no annual fee. With HomeTrust, you can access your information online 24/7. This equity line Visa credit card can be used to tap into your line of credit and in many ways is used as a typical credit card. This card is offered in the Barrie and in most regions of Ontario.
Uses of Your Equity
Some great examples of uses of home equity loans include simple home improvement tasks. This includes tasks such as finishing a basement, redoing a kitchen, as well as refurnishing as making a home more energy efficient which would obviously provide savings during those cold Canadian winters.
As mentioned briefly earlier, the Equityline Visa credit card includes debt consolidation, business financing and has many other practical uses.
This includes no upfront service charges and includes a professional relationship with the best interest of the client.
The Equityline Visa credit card offers up to a $100,000 line of credit to. More so, the benefits of the Equityline Visa credit card include rates that vary depending on collateral and borrower’s credit. Second, it also includes low monthly payments. This includes the ability to earn 1% cashback on all eligible purchases. This does not include cash advances, balance transfers, interest fees and foreign transactions.
Other Investment Strategies
Average HomeTrust lines of credits start at 6%. The Equityline Visa credit card featured from Home Trust can be a leverage tool for investments. Strategies can include tax sheltering, saving for retirement, or tax-free savings accounts, or TFSA.
HomeTrust’s rate is 2-3 more than rates at major banks. This includes major banks such as TD Canada Trust, Scotiabank, RBC, CIBC, and National Bank.
Some of these banks do have a minimum amount allowed to be borrowed but many lenders, including Bank of Montreal and Scotiabank does not have minimum amount limits. This credit card has allowed for easy access to your funds and can be repaid. The interest you pay on borrowed money is also tax-deductible. Further advanced strategies include drawing out on your equity to invest in financial products such as mutual funds, stocks, fixed income, GICs and more. These investments sometimes do not have guaranteed returns.