[Keyword: home equity loan]

Home Equity Loans: 3 Things Everyone Needs to Know

Home equity loans have gained a bad reputation ever since the economic crash, but it doesn’t change the fact that if managed responsibly, they represent an excellent and safe way for homeowners to get the capital they need. 

A decade ago, home equity loans were achieving massive success and allowed millions of people to use the inherent value of their property as an investment, but the unsustainability of the model used at the time caused a massive crash.

Now, although the market is coming back (credit lines for home equity loans rose 20% in 2015), people are still hesitant to start the seemingly complicated process. Here are three important points that will make your road to a home equity loan smooth and risk-free.

Step 1: Build your Equity

Many customers in Canada aren’t sure exactly what a home equity loan is. 

A home equity loan is a cash loan you can receive based on your home’s ratio of loan-to-value, or in other words the percentage of debt contrasted with the value of your home. 

For example, if your home is worth $150,000 and you’ve already paid $100,000, that means that you have $100,000 in equity that you can use to your benefit with a home equity loan. These loans are perfect for starting a new business, paying for a child’s university expenses, or doing renovations on your home. 

Different Types of Loans

“Home equity loan” is not a one size fits all situation. Tribecca offers a variety of loan options to help our customers accomplish exactly what they want financially. 

The most popular loan arrives in a lump sum, which the homeowner can use and manage as they wish. 

Another type is the HELOC loan (home equity line of credit), with which the homeowner has access to funds from the lender on the basis of need. 

Which loan is best for you? Well, that depends on your own personal situation. The former would be best for a one-off project, like building an addition onto your house, while the latter would be recommended for a longer-term investment, like paying for university.

Recommended for Big Projects

Tribecca is enthusiastic about helping our customers with all their financial needs, big and small, but home equity loans are not recommended for anything but big investments. Although we are committed to satisfying all our customers’ needs, many lenders aren’t willing to give small home equity loans. For this reason, we recommend these loans for more substantial projects like investing in a new property or starting a new business. There are many other loan options for smaller projects, which we are always happy to discuss with clients, but if you want to go home equity, it’s best to go big.

Tribecca is a lending company that makes it easier for you to get the cash you need through a loan or a mortgage. We specialize in home equity loans and have vast experience in guiding our clients down the path to achieving their dreams. If you’d like to know more, or you’re interested in a home equity loan of your own, contact one of our highly experienced representatives today.

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