A Moncton home equity loan or home equity line of credit (HELOC) is pretty much what it sounds like, a loan based off of the equity in your home. So what is home equity? Home equity is your share of the value of your home. It is what you truly own. Not many people can buy their home outright, so if you buy a $200,000 home and you have paid off $40,000 of that, the equity or, what is truly yours is $40,000.
Getting back to Moncton home equity loans, you have two types of home equity loans. You have a fixed rate and a line of credit. A Moncton home equity loan (fixed rate) gives you a lump sum, that is then paid back in monthly payments with a fixed interest rate in a specific time span. The Moncton home equity line of credit (HELOC) however, gives you access to those funds for whenever you may need it. It has an adjustable rate depending on what the rate is at the time.
Whichever way you need the money, some people might need a lump some for a specific reason. While other people might just like having the security of having a Moncton home equity line of credit (HELOC) it really depends on your specific financial situation.
Some pros to the Moncton home equity loan is obviously that you can get money when you need it. Whether it be a lump sum or a line of credit.
Cons to this loan is the loan does depend on the market value of your home so if the market suddenly goes down, the value in your home also decreases as well. Which means you could end up owing on your home equity loan even after you sell your home. If you can’t make the required payments on your loan, you could risk foreclosure.
Canadians with a mortgage have a lot more equity in their homes, averaging about 66% of their homes values, according to the Canadian Bankers Association.
If you want more information on a home equity loan please feel free to contact Team Jardine our team of mortgage brokers will work with you to find an option to fit your needs.
