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A home equity loan in Canada is a secured loan that sits behind your existing mortgage. This enables us to keep your first mortgage as-is and place a home equity loan in the second position.
With a home equity loan, you can pay off your high-interest debt and save more of your hard-earned money! Consolidating high-interest debt is the primary reason most homeowners opt for a second mortgage, allowing you to tap into your home’s equity. Other reasons you may need a second mortgage include renovation costs, property tax arrears, mortgage arrears, consumer proposals, investments, down payment, cash flow, or unexpected events. Call now to get a home equity loan in Toronto and most of Ontario.
Arash Sef will approve your home equity loans for residential and commercial properties all across Ontario in less than 24 hours!
The Home Equity Loan Calculator is a free and easy-to-use tool that enables you to quickly calculate your available home equity for securing a home equity loan or second mortgage. This resourceful tool will calculate the interest rate and monthly payments for the amount of home equity loan or second mortgage you can potentially qualify for.
How To Use The Home Equity Loan Calculator
The Home Equity Loan calculator is easy and fast to use:
Once you’ve submitted the above information, The Home Equity Loan Calculator will display the amount of available equity in your home for securing a home equity loan or second mortgage.
The Home Equity Loan Calculator will also calculate the monthly payments and suitable interest rate based on the amount of available home equity in your home.
Use The Home Equity Loan Calculator To See Your Available Home Equity, Interest Rate & Monthly Payments for Your Home Equity Loan.
How does a home equity loan work in Canada? Home ownership remains a popular option for Canadians despite economic uncertainty. By owning property, individuals can access financial options based on the equity in their homes.
A home equity loan is a type of loan that is designed to give you a lump sum of cash based on the value of your home. A lot of homeowners are interested in this type of arrangement, which expands their financial options.
This guide will walk you through the step-by-step process of everything you need to know about how home equity loans work in Canada.
What is a Home Equity Loan in Canada?
What are the differences between a home equity loan and a traditional loan? The main difference between a home equity loan and a traditional loan is that you’re using your home’s value as collateral. When you take out a home equity loan, you’re borrowing money against the value of your home.
If your home loses value or if you can’t afford to make payments, the lender might foreclose on your home. This means that it could take ownership of your house, sell it and in order to recoup their mortgage that was loaned to you.
Home equity loans generally have lower interest rates than traditional unsecured loans because they’re secured by real estate.
With a traditional institutional mortgage, you borrow money from the bank and agree to pay back the principal and interest over a set period — typically five year terms or so with a 25 to 30 year amortization. Traditional mortgages from Banks also require much more documents for compliance purposes such as income documents and they also are much more difficult to qualify for due to having debt servicing ratio requirements with the stress test that as put into effect Jan 1st, 2018.
The interest rate on a home equity loan is calculated based upon the total amount borrowed and the property value. The Loan to Value (LTV) determines the interest rate of a home equity loan. The length of time over which it will be repay the loan is called the term. Typically, private lenders provide interest only payment options for 1 year terms. Arash Sef has access to some private lenders that provide home equity loans that are amortized payments and with 2 year terms.
The Equity in your home, as well as the fact that you’ve been paying off your mortgage for some time, can be used to secure financing for down payment on another purchase (investment property), or debt consolidation of high interest credit card debts, or even used for home renvoations.
If you wish to explore your options when it comes to borrowing money as a home equity loan, you must research the various types of loans and their various benefits.
Are home equity loans a good idea? Home equity loans are a great way to access money when you need it, but they’re not usually the best option for long-term borrowing.
That’s why it’s important to understand the pros and cons of home equity loans before you apply. Here are seven reasons why you should consider getting a home equity loan:
1. They Have Low-Interest Rates
The first benefit of a home equity loan is that you can get a lower interest rate than you would with other types of loans or credit card debts. This is because the loan is secured by your home and because there is less risk involved in lending money to borrowers who have a home as collateral.
A 2% reduction in interest rates can mean thousands of dollars saved over the life of a loan.
2. They Make an Excellent Investment
Home equity loans can also be used as an investment vehicle. This can be especially beneficial if you have some extra cash available and want to use it to make money. You can invest this money in stocks and bonds or other investments, but these can be volatile at times. If you want something safer but still want to make some gains, then home equity loans may be the answer for you.
When you’re ready to invest in your future, a home equity loan can be the perfect way to do it. It allows you to borrow against your home’s value, and it comes with several benefits that make it a great option for investment-minded individuals.
The first benefit is that these loans provide excellent potential for investment. Many people use these loans to pay off other debts early, such as car loans or mortgages of higher interest, so they can free up more cash flow for investing and other financial goals.
Home equity loans also offer flexibility when it comes to repayment options with open terms, home equity loan lenders usually offer open terms, with prepayment penalties from 0 to 3 months of interest, depending on the lender that approves the home equity loan.
3. You Can Pay Off Debt More Quickly
For those who have been struggling with debt problems, getting rid of high interest debt could help improve their financial situation immensely. For example, if someone owes $50,000 on credit cards debts at 20% interest and they decide to take out a $50,000 home equity loan at a 7% interest rate over, they will save $6,500 throughout the 1 year home equity loan term period. Furthermore, the borrowers credit score will jump up as the $50,000 credit card debt was owed to creditors that report to the credit bureau. Whereas, the home equity loan is provided by private lenders that do not report to the credit bureau. This will increase the borrower’s credit after the following months of the creditors reporting the debt pay off to the credit bureaus. The two credit bureaus used in Ontario, Canada are Equifax and Trans Union.
4. You Can Use Them to Create an Emergency Fund
Home equity loans and home equity lines of credit are considered low-risk financial products because they’re secured by collateral (your house). In return for this lower risk, lenders will often charge an interest rate that’s slightly lower than unsecured debt such as credit cards or bank loans.
One of the reasons people pursue home equity is to build an emergency fund. For example, if you have an unexpected expense like car repairs or medical bills, you could use your home equity loan or home equity line of credit to pay for it without having to take out a more expensive unsecured loan. This reduces the amount of interest you end up paying over time since you only borrow what you need instead of going into debt for more than necessary.
5. You Can Get a Quick and Easy Approval
One of the best reasons for getting a home equity loan in Canada is that you can get approved quickly and easily.
You can apply for the loan on the same day that you meet or speak with one our licensed professional mortgage agents or brokers. The process is straightforward, and it doesn’t require much paperwork.
Home equity loans are fast and easy to obtain because they do not have credit or income requirements. Most lenders make an instant offer to us based on our relationship with the lenders. It’s very important to shop around for the best interest rate and terms before deciding on a lender, though. If you can save money on interest by switching lenders, then it’s worth taking the time to do so. Arash Sef knows all of the top private lenders for home equity loans across Canada. This enables us to get your mortgage approved within 24 hours with competitive pricing.
6. You Are Looking for an Alternative Source of Credit
Borrowing from family members or friends can be awkward, especially if they are not well off financially and therefore cannot afford to lend you money. A home equity loan provides an alternative source of credit that doesn’t have to involve uncomfortable conversations with loved ones.
When it comes to borrowing money, most Canadians rely on traditional methods. That means credit cards, lines of credit, and personal loans from banks and other financial institutions. But there are other options available, including home equity loans.
Home equity loans are a form of loan that allows you to borrow against the equity in your home. You can use the money for almost any purpose, such as paying off credit card debt or consolidating high-interest rate debt. Our lenders don’t interfere with your you use your own equity built up in your home.
You need an alternative source of credit if banks are reluctant to lend money due to your poor credit history or low-income level.
7. You Need Quick Cash
Home equity loans are relatively easy and quick to get, compared with other types of loans (such as personal loans). If you need cash quickly, this might be an option worth considering.
Now that you understand the perks of home equity loans, put your finances in order and explore your options. Here are 5 ways to get a home equity loan in Canada in 2023:
1. Figure Out How Much Equity You Have in Your Home
How do you get a home equity loan in Canada? It’s as easy as one, two, three. First, find out how much equity you have in the home. If you already have your home appraised and know that amount, great. If not, contact Arash Sef as he will take care of all the steps from A to Z, in assisting you with obtaining a home equity loan.
Alternatively, The easiest way to find out how much equity you have is by using our online calculator. The calculator takes into account the balance on your existing mortgage(s) and the current value of your home.
What if I don’t want to use an online calculator?
If you don’t want to use an online calculator, there are two other ways you can figure out how much equity you have in your home:
You can calculate it yourself (it’s pretty easy). Just subtract the balance on your mortgage from the market value of your house. The calculator goes one step further and shows you the monthly payments for your desired home equity loan amount and the maximum amount of equity you can access through a home equity loan with Arash Sef.
2. Have the Correct Prequalifications
After you have checked your home equity, make sure to investigate any pre-qualifications for applying for a loan.
The lender will want to see that you own the property and that it is in your name. You will be asked for documentation, such as a copy of your driver’s license and in some cases recent pay stub or bank statements to show income when going through the application process. Bad credit applicants are welcome — in fact, bad credit home equity loans are common. To use your home as collateral for a home equity loan, you will need to show that ownership of the home is in your name. Arash Sef will assist with this.
3. Use a Lender That Is Trustworthy
Finding the right lender requires research and time, but it’s worth it because it allows you to ensure your money will be safe and secure. It’s important to do your homework before choosing any lender, whether online or in person. Arash Sef works with Private lenders ranging from Mortgage Investment Corporations, Lenders that are Licenced Mortgage Administrations. We also have access to private individual investors that lend their own funds to home owners looking for home equity loans. We have established strong relationships with these lenders due to the high volume of mortgages we fund annually with. This allows us to get home equity loans approved at low rates and low fees.
4. Read Through the Terms and Apply for a Home Equity Loan in Canada
To get a home equity loan, you will need to know the basics.
First, you should read through the terms and conditions of the loan agreement. This will help you understand how much money you can borrow, how much interest will be charged, and what your repayment options are. You may also want to look into other available financing options before deciding whether or not you want a home equity loan.
Once you have decided on a lender, make sure to have your lawyer also review the documents to ensure the terms are explained thoroughly to you.
5. Get Preapproved For Your Home Equity Loan
Once you know your mortgage balance and figure out how much you want to borrow, it’s time to start shopping around for lenders that offer what you need at reasonable interest rates and fees. You can do this by calling around by calling us to get a quote and start your applications.
Arash Sef will approve your home equity loans for residential and commercial properties all across Canada in less than 24 hours!
After receiving your home equity loan, you must honour the terms of the home equity loan to ensure that you are getting the most from it and do not lose your home, under a power of sale in the event of a default.
Following are some points to consider once you have been approved for the loan.
Research Home Improvement Projects and Make Plans to Improve Your Home.
If you’re planning to use your equity loan as a way to make improvements to your home, it’s important to have a plan.
First, make sure that the improvements you want are going to provide a return on investment (ROI). You’ll want to be able to recoup the money you spend on the improvements by selling your house later on or refinancing after the home improvements have been completed.
Second, figure out what kind of ROI you can expect from each type of project. For example, finishing a basement will likely bring in more value to your property than adding an in-ground pool.
Third, consider how much money you need for each project. If your bathroom and kitchen need an upgrade and it cost $25,000, we would highly suggest only applying for that amount that you need. However, if you need additional funds we are always on board to accommodate your loan request and size.
If you’ve decided to use your home equity loan for renovations, make sure you’re maximizing your investment.
If you’re planning on making improvements to your home, it’s important to be strategic about how much of how you use your loan and what kind of updates to include. It’s also important that you understand how the process works. Here are some tips:
1. Make a budget and stick to it
Make sure that all of the work being done is something that will last, or else you’ll be paying more than necessary in the long run. For example, if you want new flooring in every room, consider getting one type of flooring (like tile) instead of three different types (like wood, carpet, and tile). This way you won’t have to replace the flooring again too soon because it won’t match other floors in the house—which could lead to higher costs down the road!
2. Do research before hiring contractors
You may be tempted to hire someone who doesn’t specialize in what needs to be done because they seem cheaper or more convenient than someone who does specialize; however, this can cost more money in the long run because they may not do a good job or get.
Pay Down Debt and Improve Cash Flow
If you’re considering a home equity loan, it’s likely because you’ve already used up your savings and credit lines. You may even be struggling with too much debt.
But the good news is that this is the perfect time to use your home equity loan to pay down debt and improve your cash flow.
Home equity loans are a useful fool to help you increase your home value. This can be done by making improvements to the property, paying for repairs or renovations.
If you have too much debt and not enough income, getting rid of some of those debts can help you get back on track financially. This will make it easier for you to make payments as you pay one private lender for a home equity loan instead of 5 creditors for high interest credit card debts.
Consider Optimizing Your Home Equity Loan
Optimizing your home equity loan into opportunities to refinance is always a popular option. Home equity loans can be used for a variety of different purposes, including paying off high-interest credit card debt or consolidating multiple debts into one monthly payment. However, one of the most popular uses for home equity loans is to pay off a mortgage early. When you consider paying off your mortgage early with a home equity loan, there are a few things you need to know about optimizing your loan.
The first thing you need to do when considering paying off your mortgage early with a home equity loan is to make sure you have enough equity in your home. You’ll also want to make sure that you’re comfortable with the terms of the new loan and how it will impact your monthly payments going forward; if not, then refinancing may be more beneficial than paying off your mortgage early with an equity loan.
Another thing that’s important when optimizing your home equity loan is making sure that the lender offers competitive rates on their products; this will help ensure that you get the best possible rate on your new loan, which will help save you money over time.
Pay for Your Child’s Education Using a Home Equity Loan
If you’re fortunate enough to have a home with some equity in it, you can use that equity to help pay for your child’s education. A home equity loan can provide a great way to pay for school without having to take out a high interest loan or dip into emergency savings accounts. This is because most home equity loans are interest-only. The monthly carrying cost for an interest only home equity loan is lower than amortized loans for the same loan amount.
Home equity loans also allow you to borrow up to 90% of the value of your home – so if your house is with $1,000,000, and you owe $500,000 on your current first mortgage, you can access up to another $400,000 as a home equity loan in second position. This would be considered a home equity loan for $400,000 at 90% Loan-To-Value (LTV)
The benefits don’t stop there: home equity loans typically have lower interest rates than other types of loans. This makes them one of the best options for paying for any type of expense – especially something like college or university tuition!
Get the Right Home Equity Loan for You
It’s time to speak with a licensed mortgage broker about your home equity loan options. We have years of experience helping homeowners like you make their dreams a reality.
Our home equity loan process is fast, easy, and affordable Get a free home equity loan quote from Arash Sef. Simple and fast. The process takes just minutes to complete.
Our process is fast, simple, and free. There are no traditional income or credit requirements. Approvals are based on equity only.
A licensed mortgage agent is a professional who deals or trades in mortgages for a licensed mortgage brokerage, under the supervision of a licensed mortgage broker. A licence mortgage agent must have a licence from FSRA.
Our Mortgage Agents have been trained and tested in various areas of home financing. They also have experience with hundreds of loans and can give you their opinion on whether or not a home equity loan is right for you.
They will be able to help you determine if this type of loan will fit into your financial situation, and if so, how much money you’ll need. They may also recommend other options for funding such as borrowing from family members or getting a home equity line of credit instead of taking out another loan altogether. If you’re looking for a home equity loan, Arash Sef can help.
We can help you get the home equity loan that you need, when you need it. Get in touch with us today to get a quote on your 2nd mortgage needs and get unbiased expert mortgage advice.
We can help you get the home equity loan that you need, when you need it. Get in touch with us today and get a free quote on your home equity loan needs and get unbiased expert mortgage advice.
You can also call us at 647-588-0488 to speak with an expert and start the process today.
|Current Mortgage||Second Mortgage|
|Home Value: $500,000||Home Value: $500,000|
|$300,000 1st Mortgage Balance = $1,450/ per month||$300,000 1st Mortgage Balance = $1,450/ per month|
|Before Second Mortgage||$100,000 Second Mortgage = $500/month|
|$50,000 Credit Card Debt @ 20% = $833/month||Credit Card Debt = Paid|
|$25,000 Auto Loan @10% = $208/month||Auto Loan = Paid|
|$25,000 Store Card @29% = $604/month||Store Card = Paid|
|Total $3,095/month||Total $1,950/month|
|You Save $1,145/month!!!|
I pride myself on providing supreme efficiency and quick turnaround times on all mortgage inquires. With access to my extensive list of real estate investors, I’m able to assist homeowners with those “hard to place mortgages” in a short period of time. My professionalism and lengthy experience in the industry will allow for stress free and painless mortgage process.
I never charge clients upfront fees. I offer free no-obligation consultations to all homeowners looking for unbiased and up-to-date information on your very best options.