Home Equity Line of Credit Richmond Hill: Gain Financial Freedom One Step at a Time

Navigating the world of financial forecasting and borrowing is daunting and rather complicated for those who are new to the game or have relied on others to do the dirty work. Understanding the benefits of opening a home equity line of credit could potentially save a Richmond Hill homeowner a substantial amount of money. Keep reading to learn about such a line of credit and the benefits of enrolling when compared to a mortgage.

What Is a Home Equity Line of Credit?

A home equity line of credit (HELOC) can be defined as a second loan that is granted to a homeowner once a certain amount of pre-existing debt has been consistently repaid. One can only be eligible if they had a mortgage in the first place. The value of the home that has been paid off during the loan period is used as collateral when opening a HELOC.
One must consult a financial professional prior to applying in order to ensure they will be approved. A first-time buyer cannot enjoy the benefits of a HELOC, as it is reserved for trustworthy and organized owners who have shown that they can manage and repay debt appropriately.

Benefits of Enrolling

Here are few of the reasons opening a home equity line of credit is extremely economical as well as beneficial to homeowners with owing debt:
  1. Improved credit score. Payments are made easy with a HELOC. If homeowners can pay debt off more consistently, their credit scores will naturally improve.
  2. Tax deduction opportunity. In some cases, the interest you pay on a HELOC can be tax deductible. Be sure to keep track of how much you have given over in order to ensure a potential break when filing time hits in the spring.
  3. Freedom. A mortgage can only be used to pay off property debt. A HELOC, on the other hand, gives the borrower more financial freedom. One can access the loan for any type of purchase, as it is not strictly reserved for property. Making a large purchase becomes easy and accessible as debt is consolidated.

Staying on Top of Rates and Financial Forecasts

It is extremely important to stay up to date on interest rates and trend fluctuations if one wishes to maintain an optimal payment schedule. If you leave it all up to the professionals, you could easily be paying much more than necessary without even understanding the options available. The Internet makes this task extremely easy; one can even program immediate smartphone alerts that will show and compare major financial institutions rates. Online mortgage rate calculators are also widely available and easy to use.  
Currently, the best five-year fixed mortgage rate in Canada sits around 2.69%. Variable interest is lower, approximately 2.10%. A home equity line of credit almost always has a lower interest rate when compared to a mortgage. One can also opt to solely make interest payments on a line of credit if cash flow is taking a hit. A mortgage, on the other hand, requires consistent and substantial payments without any exceptions.

Open a Line Today

So, what is stopping you? Contact a reputable and trusted financial professional in Richmond Hill and kick-start the processing of opening a home equity line of credit now.



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