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An equity mortgage is a mortgage based on the amount of equity in your home (the net amount left after deducting the mortgage from the home’s value). Usually lenders will lend up to 75% (in some cases only 65%) of the value of your property.
If you have good credit you will typically qualify for a fully discounted interest rate. If you have some credit issues the lender will charge you a higher interest rate to mitigate the risk.
Essentially, an equity mortgage is a second mortgage or a collateral mortgage to a demand loan that allows you access to the equity built up in your home, either in a lump sum or a line of credit.
If you just want a small line of credit ($5,000-$10,000) most lenders will lend it to you without the cost of having to have a mortgage arranged and registered.
Please contact us for further details on our equity mortgage products.
When it comes to getting access to a home equity secured line of credit in Edmonton you can count on Cindy Janisch to provide you with choice, service and knowledge.
A Home Equity Secured Line of Credit is a product that is secured as a Collateral Mortgage on your home. In order to be approved for a Home Equity Secured Line of Credit (HESLOC) you will need to have a minimum of 20% equity in your home. For example if your home is valued at $400,000 then you can have a HESLOC registered for $320,000. A HESLOC is a excellent product if you like to have the convenience of borrowing against your equity and re paying.
Have the convenience of qualifying for this product once and being able to use it over and over again without the fear of being declined for other major purchases.
Having access to a secured line of credit is an excellent asset to have in your ﬁnancial portfolio and can allow you the freedom to make large purchases with the line of credit portion with low interest rates. Typical rates for a Home Equity Secured Line of Credit can be set at Prime + 1%. This is quite a bit lower than the rates offered on Unsecured lines of credit which can range between Prime + 4-8%. The line of credit is an open product which can be borrowed against and repaid over and over again.
Some people like to use the secured line of credit to ﬁnance the purchase of a new car, investments, renovations, tuition or opening a new business.
There are many lenders who offer this product and each lender has a variation of the product. There are HESLOC’s that can have a mortgage component with the Line of Credit. Some lenders will allow you to have a mortgage set up with a ﬁxed rate based on a 25 year amortization. Plus, adding a Line of Credit portion to the mortgage based on Prime + 1%. The line of credit portion is always open and you can repay as little as the interest only or as large as the entire balance.
In order to qualify for the Home Equity Secured line of credit you will have to have a full application veriﬁed by the lender, they will conﬁrm your income levels, credit score and request that an appraisal be completed on the home. Because the lenders are approving this product based on the amount of Equity secured in the home. You will be required to register a Collateral Mortgage on the title of the home which will be done by a lawyer or a title company. Your credit score will have to be high as the lenders want to ensure that you have a good history of repayment on any previously opened trade lines. Contact Cindy Janisch to see if this product is a good option for you.