Best Equity Loan Rate

How can you find the best equity loan rate? Our home is likely our most valuable asset and provides us with an excellent way to raise money fast. To make the most of our home, we need the best rate. Compared to loan rates, mortgage rates and home equity loan rates are generally quite low, but it still pays to look around for the best equity loan rate possible.

Homes are among the most common methods used to raise money quickly. With a home equity loan, we can have cash in our hands as soon as 1 week. Obtaining approval is usually quite easy since the loan is secured by the equity in your home.

Mortgage & home equity loan lenders will often base the rates they offer on the level of risk they are taking. If we have excellent credit, good income, little or no debt then we could get the best equity loan rate. If we had bad credit lots of debts and little or no income it would be a much higher rate.

Best equity loan rate

Our current mortgage holder knows our history, but they aren’t always the best option to get the best rates.

Where To Find The Best Equity Loan Rate

We could hunt down a lender with the best rate ourselves, but it is much simpler to enlist the aid of a mortgage broker. Mortgage brokers have access to many lenders. These lenders include large banks, smaller banks and trust companies as well as private investors and mortgage fund. Many of these lenders don't advertise and you would never be able to find them without the help of a mortgage broker.

A mortgage broker will also deal with the banks that you deal with, either directly or indirectly. Some banks don’t work directly with mortgage brokers, but they do own subsidiaries that work exclusively with mortgage brokers.

Contact Us Toll-Free 1-877-386-7745!

For a free, no-obligation conversation about best mortgage rates and your home equity loan needs, request a Complementary Mortgage Quote, or call Toll-Free 1-877-386-7745. We're waiting to help you.

Many lenders pre-negotiate excellent rates with mortgage brokers, offering the lowest rates based on volumes and other factors. When a lender deals with a client directly, they negotiate the rate based on the additional business the client is willing to bring to the bank. The more business: accounts, investments, RRSP’s, loans, credit cards, banking plans, the lender can sell the client, the lower the rate could be.

When the lender is dealing with a mortgage broker, they don’t ask for all this other stuff up front. They offer the lowest (or best equity loan rate) through the mortgage broker because of the volume of business sent by the broker and in hopes that they can sell some of this other stuff to the clients later.

Best Equity Loan Rate: What Do You Need?

Mortgages & Home equity loans can be very confusing. Once we find a lender, we have to look at all of our choices and options.

  • Do we want a variable rate?
  • A fixed rate?
  • What contract length (term) should we choose?
  • How long do you need to pay off the loan (amortization)?
  • Do we want a mortgage or home equity loan, a second mortgage, a home equity line of credit?

A home equity loan is not a one size fits all. Each situation is different. However, for most people a fixed rate is the best place to start.

Get the best equity loan rates from a Calgary mortgage broker

Best Equity Loan Rate: How Much Can We Borrow

The equity in our home is the difference between how much we owe on our mortgage and how much our home is worth on the open market. Many lenders will require us to have our home appraised to get the most accurate estimate of how much equity there is available. The longer we own your home, the higher your equity will be.

Each mortgage payment we make increases our equity. When housing prices go down, we lose equity and when markets rise, our equity increases. Over the last 10 years, on average, a house appreciates by about 5 percent a year. But, this is not always the case.

Another way to increase the amount of equity in our home is to make improvements. A new kitchen, new bathroom or a finished basement will generally increase your home's value much more than the cost of the improvements. Even outdoor improvements, such as a deck or a sun room can increase the value of our home.

If we have made recent home improvements, we will definitely want to get an appraisal before seeking an equity loan. Rather than pay for a certified appraiser, we could ask a couple of realtors to provide an estimate. Realtors will typically give you a good estimate of your home’s value. I suggest 2 or 3 realtors, because sometimes a realtor will tell you a higher number to encourage you to sell. (not always)

If you wish to apply for a mortgage or home equity line of credit, let the lender order the appraisal. They will have a list of appraisers and if we paid for an appraisal from an appraiser who isn’t on the lenders approved list, then we may have to pay for a second appraisal!

When we purchase a home we can borrow up to 95 percent of the purchase price. However, when we refinance our home we can only finance up to 85% of the home’s appraised value. If we borrow between 81% and 95% of the purchase price or appraised value, this is called a high ratio mortgage. If we borrow 80% or less of the home’s value, this is called a conventional mortgage.

We can have more than 1 mortgage or home equity loan registered on the title of our home. The mortgage (home equity loan) that is registered first is called the first mortgage. The home equity loan (or mortgage) that is registered at a later date is called the second mortgage.

In general, a second mortgage or home equity loan that is registered in second position will have an interest rate that is slightly higher than a first mortgage. This is because the lender is second in line to be paid if the mortgage goes to foreclosure. If something happens and we stop making payments, a lender will take action to try to recover their money.

When our home is sold, the first mortgage is paid and then the second mortgage holder is paid with what is left over. If there aren’t enough funds to pay both mortgages, then the second mortgage holder will loses out before the first mortgage holder!

Contact Us Toll-Free 1-877-386-7745!

For a free, no-obligation conversation about best mortgage rates and your home equity loan needs, request a Complementary Mortgage Quote, or call Toll-Free 1-877-386-7745. We're waiting to help you.

For The Best Equity Loan Rate Speak To An Expert

Mortgages, interest rates and home equity loans are complicated and confusing. Before we try to negotiate a loan, we may want to speak to an expert. Mortgage agents and brokers are a good place to start. They are able to examine our situation and give sound advice on what is best.

Many people think that a mortgage broker will charge a fee for his service. This isn’t completely accurate. Most lenders will pay a mortgage broker a commission for introducing new clients. If the broker receives a commission, then the borrower doesn’t pay a fee. Most A lenders will pay a referral fee to the mortgage broker.

If a client has bad credit and needs to go to a private lender, or “B” lender, then there may be a professional fee to help bring both the client and lender together.

An experience qualified mortgage professional will not just find the best lender for our situation and the best equity loan rate, he can help us decide which loan option is the best choice for us.

Return from Best Equity Loan Rate to the Best Canadian Mortgage Rates menu

Visit the Home Equity Loan Strategies home page

Talk to An Expert 1-877-386-7745