Home Equity Line of Credit ( HELOC)

The Mortgage Perspective

When delving into the landscape of other home equity lines and loan products in Canada, Shelto’s offerings stand out for their flexibility and customer-centric approach. With a home equity loan from Shelto, homeowners can tap into the equity built up in their property, calculated by assessing the market value of the home minus any outstanding mortgage balance. This form of loan serves as a powerful tool, allowing borrowers to harness the market value of their homes to secure favorable interest rates. While the home equity line of credit (HELOC) option comes with variable interest rates, there is the security of knowing that you only pay interest on the amount you borrow, making interest payments more manageable.

Deeper Insights into Home equity loan HELOC

A home equity loan serves as a pivotal financial tool, providing a lifeline to those seeking to leverage the value of their homes. At Shelto, we comprehend the intricacies of utilizing a home equity loan to unlock your financial potential. The appealing variable interest rates on our home equity loan mean that you can potentially pay interest at a lower rate compared to other forms of credit. The home equity loan allows you to a high credit score and consolidate various financial needs into one, with the option to pay interest only on the utilized credit limit, thereby offering a pathway to manage your interest payments more effectively. Understanding the fixed interest rate options alongside the variable interest rates of a home equity loan is crucial, as it enables you to make an informed decision based on your financial aspirations and requirements.

How much I can borrow using HELOC?

Typically, lenders allow up to 80% of property value combing your primary mortgage and HELOC. For example, if you home value is $1M, and you have primary mortgage of $600K, then you can get HELOC up to $200K, making combined mortgage amount to 80% of property value.

Can I get HELOC from other lenders if my current lender declined?

Yes, We have multiple lenders for you to offer differ options to get HELOC, keeping your primary mortgage with the current lender or with breaking it.

Explore various HELOC options available in Canada

In Canada, the home equity loan landscape is diverse, with Shelto leading the way in our credit products and offering tailored solutions. One of the key advantages of a Shelto home equity loan is the flexibility it offers in terms of credit limit. Based on the market value of your home, we work to provide you with an available credit limit that suits your needs. The variable interest rates on a home equity line from Shelto are competitive, and borrowers have the option to switch to a fixed interest rate if they desire more stability in interest rate fluctuations. The ability to only pay interests on the borrowed amount gives borrowers control over their interest payments and can lead to potential savings.

Top Reasons why borrowers choose HELOC

• Utilization of Home’s Market Value: The home equity loan allows borrowers to leverage the market value of their property to secure a favorable interest rate, thereby unlocking financial possibilities.
  
  
• Flexible Credit Limit: The home equity line option offers a flexible credit limit, allowing borrowers to use as much or as little as they need, based on the market value of their home.
  
  
• Competitive Variable Interest Rates: The variable interest rates on a home equity line can be lower than other forms of credit, with the added benefit of having the option for a fixed interest rate.
  
  
• Interest Payment Control: With a home equity loan from Shelto, you only pay interests on the amount you use, which can make managing interest payments more straightforward.
  
  
• Debt Consolidation: By using a home equity line, borrowers can consolidate multiple debts, potentially benefiting from lower interest rates and streamlined payments.
  
  

Remember, the available credit limit on a home equity line from Shelto is tailored to each borrower, offering a personalized solution for every financial scenario. Whether you’re looking to consolidate debts, renovate your home, or borrow money to cover education costs, a home equity loan from Shelto in Canada can be a versatile financial tool. Balancing the benefits of variable interest rates against a fixed interest rate, understanding your credit limit, and knowing how to manage your interest payments are all part of maximizing the advantages of your home equity loan.

Purpose of getting HELOC

• Home Improvements: Many borrowers use HELOCs to fund home renovation or improvement projects, as it allows them to reinvest in their property, potentially increasing its value.
  
  
• Debt Consolidation: HELOCs can be used to consolidate high-interest debts, such as credit card balances or personal loans, into a single, lower-interest payment, making it easier to manage and potentially saving money on interest.
  
  
• Education Expenses: HELOCs are often used to cover educational costs, including tuition fees, books, and other expenses for the borrower or their family members.
  
  
• Emergency Fund: Some borrowers establish a HELOC as an emergency fund that they can tap into in case of unexpected expenses, medical bills, or job loss.
  
  
• Investment Opportunities: Real estate investors may use HELOCs to access funds for purchasing additional investment properties or making other real estate investments.
  
  
• Business Ventures: Entrepreneurs and small business owners sometimes use HELOCs to finance their businesses, cover operational costs, or fund expansion.
  
  
• Vacation or Travel: Borrowers may use HELOC funds to finance dream vacations or travel experiences.
  
  
• Large Purchases: HELOCs can be used to make significant purchases, such as buying a new car, boat, or other high-value items.
  
  
• Weddings: HELOCs can help cover the costs associated with weddings and related expenses.
  
  
• Retirement Planning: Some individuals use HELOCs as part of their retirement planning strategy to supplement their income during retirement years.
  
  

Myths about HELOC

• Myth 1: HELOCs Are the Same as Home Equity Loans
  

  Reality: This is a common misconception. HELOCs and home equity loans are distinct financial products. HELOCs provide a revolving line of credit similar to a credit card, while home equity loans offer a lump sum upfront. They have different features, interest rates, and repayment structures.
  
  

• Myth 2: HELOC lowers credit score
  

  Reality: Credit score can be impacted in various ways and in fact having optimal used HELOC shows better credit-worthy
  
  

• Myth 3: HELOC is expensive
  

  Reality: HELOC might be expensive than a primary mortgage but can be cheaper than unsecured loans
  
  

• Myth 4:HELOCs Are Just Like Credit Cards

  Reality: HELOC might be expensive than a primary mortgage but can be cheaper than unsecured loans
  
  

Conclusion

• Pros of HELOC
  

  Home Equity Line of Credit (HELOC) is a versatile financial product that can provide homeowners with access to funds based on the equity they’ve built in their homes. HELOCs offer several advantages, including flexibility in borrowing, potentially lower interest rates, and the option for interest-only payments during the draw period. Additionally, the potential tax benefits associated with HELOC interest make it an attractive choice for certain home-related expenses.
  
  

• Cons of HELOC
  

  Borrowers must exercise financial discipline, as HELOCs are secured by their homes, and non-payment could result in foreclosure. Variable interest rates and changing market conditions should also be considered when assessing the long-term cost of a HELOC. Careful evaluation of individual financial needs, a clear repayment plan, and consultation with financial professionals are essential steps for responsible and informed use of a HELOC.