Using a Home Equity Loan for Debt Consolidation

familylendingMortgage Talk Canada

Have you considered this popular alternative?

blue home 2The biggest debt you are going to deal with as a property owner is your mortgage. With the right approvals, you are able to borrow against the equity of your house with a home equity loan.

What is a Home Equity Loan?

This style of loan is somewhat different to a home equity line of credit (HELOC), which is a line of revolving credit with a flexible interest rate. A home equity loan is a one-time lump-sum loan. Lenders are normally worry-free when contributing to your existing low mortgage rate since they are protected by the fact that your loan is secured against your house.

A Tool for Debt Consolidation

The main benefit of a home equity loan is in its debt consolidation abilities.

How do I get a Home Equity Loan?

The best way of obtaining a home equity loan is through a Canadian mortgage rate professional.

Benefits of a Home Equity Loan

  • Money in your hands to settle outstanding high interest debts
  • By paying off outstanding debts you are going to enhance your credit score
  • The home equity loan may be spread over the lifespan of your best mortgage rate, typically as much as 25 years
    • Tax deductions are readily available

Downsides of Home Equity Loans

  • You will be jeopardizing your home if you do not have the means to pay the loan back.
  • Once you borrow against your house you lose equity or ownership in the home.

Speak to a mortgage broker today to find out if this financial product is the right choice for you.

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