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In Ottawa, Ontario, home equity loans are often used to fund renovations, big purchases or even to consolidate debt. When you buy a home, as the value of that home rises, you can take out the increase in value as a loan. This has proven to be an ideal solution for various individuals. If you are interested in a home equity loan but aren’t sure how to apply, don’t worry because it can be secured from the warmth of your home and Smarter Loans is here to show you how.
Now that we’ve defined a home equity loan, how do you acquire one? Well there exists a multitude of options for providers in Ottawa that are qualified and reliable.
You’ll have a great chance of getting approved if you are able to connect with a loan provider that understands what your unique needs are. To help you with this next phase, Smarter Loans has prepared a directory below that includes the most reliable home equity loan providers from Ottawa. Scroll down to view terms, rates and offers and apply to the ones that are best fit for your needs.
Once you’re ready to apply, simply click “apply now” in order to proceed to the next phase. If this is proving to be a challenging task because you aren’t familiar with the options presented, an easy alternative is to pre-apply with Smarter Loans. With a pre-application, we’ll connect you with a provider from Ottawa that we deem the most suitable for you.
If you’re one of the two thirds of Ottawans who own their own home, you have several options for borrowing money against it. Home equity loans and home equity lines of credit (HELOCs) are sometimes confused, but they are actually quite different. A home equity loan provides you with an upfront lump sum, for which you make fixed payments for the life of the loan. A HELOC is like a credit card secured against your home – you can only borrow up to the maximum amount allowed, but this can be taken out in smaller sums, as and when you need it. And because of this, a HELOC does not have a fixed repayment schedule.
The amount you can borrow with a home equity loan depends on the value of your Ottawa home and whether you have any other loans secured against it. In theory you can borrow up to a total of 85% of your home’s value; Ottawa has an average property price of $681,000, so this means you can borrow up to $578,850 (85%). However, if you have a mortgage or other home loan, you must minus its balance from your 85% borrowing room. Some lenders also have upper limits on how much you can borrow.
Almost all home equity loans in Ottawa are repayment loans rather than interest-only loans. Exceptional borrowers, with a lot of equity, very high credit scores, or other financial criteria that makes them a very safe bet, may be able to get an interest-only home equity loan. However it’s important to bear in mind that most traditional lenders won’t offer interest-only home equity loans, so alternative lenders are your best bet if this is a priority for you.
As Canada’s capital city, Ottawa offers plenty of options for its homeowners seeking a home equity loan. The list in the table above is a good place to start; there are also traditional lenders, like banks and credit unions, and a slew of online lenders, as well as some alternative lenders for those looking for more bespoke loan terms. It’s important to make sure that wherever you go, your chosen lender is reputable. Avoid anywhere that has high fees, isn’t transparent, or has bad customer reviews.
As with all types of loan, the requirements you must meet in order to be approved for a home equity loan depend largely on the lender you choose. Every lender has their own credit score criteria – but a good guideline is that most traditional lenders (like banks and credit unions) have a minimum credit score threshold of 650. As Ottawa’s average credit score is 685, this means many don’t need to worry about this requirement. However, there are still plenty of options for Ottawa’s bad credit borrowers – for example, some of the alternative lenders listed in the table above.
