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Home Equity Loans in BC

When you need quick cash, a home equity loan in BC gives you the flexibility you need. Most lenders will approve your loan within a day or two, so you will have the cash in your account to use for whatever financial need you have. In British Columbia, you might have seen ads saying that home equity loans are easy to access. You can get these loans irrespective of your credit score, age, or level of income, as long as you have home equity. Most of the ads are true as home equity loans are easy to access when you have home equity.

With so many lenders, you need to take your time and choose the best home equity rates in BC. However, please note that different types of home equity loans come at different interest rates. Read on to learn everything you need to know about the different types of home equity loans.

What Is A Home Equity Loan In BC?

If you have bad credit (a credit of less than 600), and you do not have a reliable income, you can consider home equity loans instead of other bad credit loan options. A home equity loan is a loan against your home equity. Your home equity is the total home’s market value less the amount you owe from lenders. For instance, if your home is valued at $300,000 and you have an unpaid mortgage of $120,000, then your home equity is $180,000.

You can take a primary home equity loan (primary mortgage). You can also take the loan as:

  • A second mortgage (and sometimes even a third mortgage)
  • A home equity line of credit (HELOC), where you access the money instantly through a credit card
  • A mortgage refinance where your primary mortgage lender gives you a loan top up while you are still paying your first loan
  • A reverse mortgage for retirees who cannot afford to make regular monthly payments

A reverse mortgage has the least home equity loan requirements, followed by a second mortgage, and, finally, a first mortgage. For HELOCs, you might need a good credit score and a reliable source of income besides home equity. However, compared to any other option, HELOCs have lower interest rates.

What Can You Use A Home Equity Loan In BC For?

A home equity loan in British Columbia can be taken out for any reason. Some of the most common uses include:

  • Consolidating high-interest loans
  • Paying college fees for your children
  • For home renovations
  • Making investments or boosting a business
  • Miscellaneous uses such as medical bills, vacations, and helping family members

Home Equity Loan In BC vs. Second Mortgage

Any loan you take against the equity on your home is a home equity loan. A second mortgage is a loan you take when you are still paying your primary mortgage. This second mortgage is a second lien that will only be paid after the first mortgage is paid in full in the event of a foreclosure sale. Second mortgages in BC are more expensive than a home equity loan in BC, as the lender takes a bigger risk lending you money. The interest rate is higher if you have a bad credit history and you do not have a reliable source of income.

Another option for unlocking your home’s equity is a mortgage refinance. Click here to learn more.

Pros and Cons of Home Equity Loans In BC

Pros

Get Money Instantly

After the appraisal process, you will get instant approval. Most lenders will offer you approval within a day. Again, if you need instant money to take care of emergencies, you can apply for a home equity line of credit.

Get as Much as Your Home Equity Allows

If your home is valued at $500,000, lenders are willing to offer you up to $400,000 or more (80 percent of the value of your home).

Flexibility

You can use your home equity loan however you want without any restrictions. You can get the loan in a lump sum or through a credit card to meet your financial needs.

Cons

Variable Interest

You might have to pay more every month if the interest on HELOCs varies. This can disrupt your monthly budget.

Additional Fees for Mortgage Refinance

If you choose a mortgage or refinancing, you will pay for appraisal fees, other administrative fees, and potentially high interest.

Trust Loans Geeks for Finding the Best Home Equity Loan Rates in BC

Loans Geeks is your one-stop platform for everything loans in Canada. They are like a mortgage broker who helps you find the best home equity loan rates in BC. The platform lists all licensed lenders in BC and beyond, helping you choose the lender that best fits your needs.

Conclusion

You need to budget your money to ensure you do not miss monthly payments. Unlike unsecured loans, home equity loans might see you lose your home. These loan options, just like car loans, might be affordable, but can also be risky when you do not plan your money well.

Frequently Asked Questions

What is a home equity loan in BC?

This is any loan you take against your home’s equity.

How does a home equity loan work in BC?

Your home is appraised, and any amount you owe lenders against the home subtracted to find home equity. Lenders will approve a loan based on this equity.

How do you get a home equity loan in BC?

Home equity is the major requirement to get a home equity loan in British Columbia.

How long does it take to get a home equity loan in BC?

It takes anywhere from 24 hours to a few days to process your loan application. The approval process involves appraising your home.

What is needed for a home equity loan in BC?

Besides home equity, some loan options such as HELOC require that you have a good credit score and a reliable income to get the home equity loan benefits.

How much can I borrow with a home equity loan in BC?

You can borrow as much as 80 percent of the appraisal value of your home. With good credit and reliable income, you can borrow up to 85 percent from some lenders with lower interest rates.

5 Biggest Banks in BC

  1. Royal Bank of Canada
  2. Toronto-Dominion Bank
  3. Bank of Montreal
  4. Bank of Nova Scotia
  5. Canadian Imperial Bank of Commerce

5 Things To Do In BC

  1. Watch Whales on Vancouver Island
  2. Hike the trails on Vancouver Island’s West Coast 
  3. Sample the Wines of BC in Thompson Okanagan
  4. Enjoy the view at Harrison Hot Springs
  5. Shop the Salt Spring Island’s, Saturday Market 

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Check Your Rate

A home equity loan allows you to access funds (also known as “equity”) tied up in your home. Interest rates tend to be much lower for home equity loans compared to other types of financing because your property is listed as collateral on the debt.

The amount of money you’re eligible to receive through a home equity loan all depends on the value of your property and how much equity you have built up in it. As part of the process, the lender will appraise your home and determine your equity.

While individual lenders may have their own stipulations, you can generally use a home equity loan for just about anything. People regularly use them for paying off high-interest debt, covering financial emergencies, and even taking vacations.

Lenders set their own home equity loan rates. They generally range from 2.35% to 4.45%. A major factor to consider, however, is the prime rate, which is set by the Bank of Canada. Lenders set rates as an additional percentage above prime.

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