Mortgage Tips

An equity loan is a great way to convert your equity in your home into cash. It offers many advantages like lower interest rate (as it is backed by an asset), flexible loan amount (in case of a home equity line of credit or HELOC), and a long repayment period, which will keep your monthly payments affordable. If this is the first time you are looking for such a loan and are asking yourself where should we get an equity loan in Canada, here is some information to get you started.

Most Mortgage lenders who offer mortgages also offer equity loans, as the underlying risk and other characteristics like loan amount and payment term of these two categories of loans are very similar. You can approach different types of lenders to take out an equity loan.

Banks

The first place to look when you are asking yourself where should we get an equity loan in Canada is your local bank. A large proportion of banks, especially big ones, offer equity loans. You can contact the bank where you have a pre-existing relationship, like a savings account, to find out if they can offer you an equity loan on a low interest rate and attractive terms. The main advantage will be that as the bank will already have a lot of documentation on you, the processing time and formalities will be lesser.

Credit Unions

A credit union is a cooperative financial institutions run by its members. The structure of a credit union is significantly different from a bank, but it performs many of the same functions. It can take deposits and offer loans and other financial services to its members. If you are already a member of a credit union, find out if they offer equity loans. Otherwise, look for credit unions in and around your area and find out how you can access their services.

Mortgage Companies

There are many mortgage companies that do not take deposits like a bank does but have access to other sources of funding, which they use to offer property backed loans to customers. There is a very good chance that you will be able to get an equity loan from a mortgage company in your area if your credit score is good and you have sufficient equity built up in your home.

Private Lenders

Private lenders are high net worth individuals who offer loans through direct contact with borrowers. This kind of lending is usually more expensive as private lenders charge a higher interest rate. It is a good choice if you don’t have a stable income and have been turned down by other lenders. The loan disbursement process is also much quicker in private lending.

Before you choose any one of these sources of funding, carry out a careful comparison between the offers that you are getting. Compare interest rates as well as other terms of the loan. The best person to ask where should we get an equity loan in Canada is a mortgage broker. He can simplify this whole process for you and help you make the right choice of lender.