What is Equity at Home?
Home equity is the difference between the market value of your house and what you owe on your property. For example, if your house has a $700,000 market value, and you owe just $50,000, you’ve got $650,000 of equity left in your house.
One of the biggest benefits of home ownership is the ability to create equity, particularly during your home ownership years. You may not be able to sell your equity, but the advantages from home equity loans provide access to funds that can boost your financial condition.
What is a home equity loan?
In Canada, a home equity loan is a generic concept that describes various forms of loans in which the borrower uses their home equity as collateral. In Canada, home equity loans usually offer higher sums and lower interest rates than unsecured loans, as the home is used as collateral. Other possible home equity loan advantages can include flexible repayment options – not to mention that they are often the only choice if unsecured loans are not available (if you have a low credit score, for instance).
You might be able to apply directly through your bank or via a mortgage broker if you are wondering how to get a home equity loan in Canada. Requirements for home equity loans differ according to the type of loan you are applying for.