Canada Home Equity Loan

Whenever possible with Canada consolidation debt loan mortgage financing, you should obtain an equity based loan for a Canada mortgage by using the strength of the equity in your home. You should be looking for a Canadian equity home loan.

The savings are enormous.

You will save hundreds and hundreds of dollars each month in cashflow savings. You may even save significant interest savings… but mainly you will be replacing expensive short term ‘credit card’ minimum due payments compared to one low monthly mortgage payment with a Canada consolidation debt loan mortgage. It can make the difference of you being able to keep the family home or not.

Is saving money the only reason?

Well to save cashflow is the obvious answer but besides ‘keeping the house’ one needs to keep sane. You need to remove the stress of having creditors calling you night and day. Emotion is high when one remembers all the people who literally break down on the phone and cry about the debt load that they are under.

As a Canada mortgage consultant it is painful to hear the stories …and there are many of them! A young mom died from breast cancer and left a widower and his 10 - year old daughter with large medical bills to deal with. Or how about the self-employed worker who fell and didn’t have enough benefits to keep up on his bills and was losing the family home… countless stores of illness or loss of work everyday … divorce or separation every week … and downright depression suffered by all. Marriages and relationships have been ruined by bad debt. Yes it is hard to hear the stories but even worse to live the story. To remove the stress one needs to pay off all the debts possible to get a clean start again. Thankfully, the nice part about hearing a sad story is when a Canada mortgage consultant can say ‘I can solve it’. A Canada mortgage consultant can solve the problems created by too many debts that have too many minimum due payments. It is solved with a Canada consolidation loan.

There are two main routes to take for a debt consolidation loan when using home equity. The best route is to simply rewrite or refinance your 1st Canada mortgage or first Canada mortgage and make the loan big enough to payoff all your ‘other debts’ in addition to your current first Canada mortgage amount.

Some people have average to good credit.

Good for them. It means lower interest rates. It may mean even less fees in refinancing their 1st mortgage Canada loan. It is often better to just rewrite a first mortgage – even with some prepayment penalties – and be able to obtain a low variable rate mortgage than to take out a 2nd mortgage Canada loan. When Canadian equity home loan interest rates are declining, your mortgage interest rate is also declining. A Variable rate mortgage is a cheap source of Canadian equity home loan financing and is especially attractive in a market where interest rates are forecast to continue dropping. But even in a rising prime interest rate market a variable rate mortgage still is cheaper than many fixed rate mortgages. Many variable rate mortgages will allow you to lock into a fixed-rate mortgage when you think interest rates have bottomed out and may start going back up. The rates and features for these Canadian equity home loan mortgages vary widely from bank to bank.

But, truthfully, most people seeking a Canada consolidation debt mortgage often have poor to average credit.

Often just bad credit. If their credit is not ‘too bad’ then it may be possible to rewrite the first Canada mortgage as well. The rates will be higher but much lower than a 2nd Canada mortgage would be or a Canada second mortgage would be.

The second option is to obtain a second mortgage Canada loan. And this is what makes a home equity debt loan possible. Credit is not an issue. We assume it is bad. But a private lender will lend up to 75% and sometimes, though not too often, up to 85% of the appraised value of your home. Often the 2nd mortgage or debt consolidation loan will be interest only or have a large enough amortization time period (25 or even 30 years) so the payments are made as small as possible. And average interest rate for a 75% loan to value loan is 12%. So for a $30,000 loan then an interest only payment would be $300 per month. Often the term expires in one year.

The good thing is that the Canada debt consolidation loan or Canada second mortgage loan is a temporary measure. Often only in place, waiting for your ‘new’ credit situation to be reflected in your credit report, with all your bills paid off and with you paying all future bills on time, and up and until your 1st mortgage can be rewritten at its maturity date or refinanced at a time to include the entire 2nd mortgage amount or Canada debt consolidation amount.