It’s no secret that Toronto ranks among the most expensive cities in Canada to live in, and its real estate market is up to par. Unfortunately, a higher cost of living can lead to a higher level of debt. Fortunately, homeowners can take comfort in knowing that rising home prices can help them get more out of the equity in their property. More equity means you can potentially access more funds through a home equity loan. This means you can settle your debt consolidation in Toronto without selling your properties.
First of all, what is a home loan?
A home equity loan or home equity line of credit (HELOC) allows you to borrow against the equity in your home. So if you own a house that is currently worth $500,000 and you owe $400,000 on your mortgage, you have $100,000 in equity. The more you stake on your mortgage, the more equity you have. Another way equity increases is through natural appreciation and when the overall real estate market is robust, home values rise faster, as they did so fervently in the T-dot.
Why use a home loan to pay off a debt?
The main advantage of using a home equity loan to pay off debt is that you can usually get a much lower interest rate than personal loans or credit card rates. The average interest rate on a home equity loan hovers below 6%, while the average credit card charges over 19%. A lower interest rate means less total interest paid over the life of the loan. This is especially useful if you are struggling to repay the principal due to high interest amounts.
To add to that, home equity loans mean you don’t have to sell your home. In fact, they tend to be easier to qualify because your property serves as collateral so they can come up with longer repayment terms. Lower interest rates and longer repayment terms can also mean lower monthly payments, making paying off debt more manageable and less stressful, especially if you have a tight monthly budget.
If you consolidate your debt from multiple credit cards and loans into one home equity loan, you simplify your payments. You only have one loan invoice per month, which reduces the risk of late payment.
Is a Debt Consolidation Home Loan Right for You?
Home equity loans and HELOCs are your best options for debt consolidation in Toronto if you plan to stay in your home for an extended period of time. You should also have significant equity in your home, usually at least 15-20%. It will also help if you are confident that your income will be stable throughout the repayment period and that you can comfortably commit to paying off your debt. Debt consolidation services are becoming increasingly popular among those who simply want to make their debt more manageable.
How can you get a home equity loan?
For debt consolidation around Toronto, lenders like banks and credit unions offer home equity loans, but often have strict criteria that hold many Canadians back. At Alpine Credits, all you need to qualify is to own your home (or other real estate) and have accumulated equity. The focus is on the value of your home equity, not your age, credit, or income history. With a simple application process, Alpine Credits can have funds approved in as little as 24 hours. This means you can consolidate all of your debt, whether it’s credit cards, car loans, student debt, or overdue bills. Plus, Alpine Credits loans are structured to help you get out of debt and out of debt. Borrow the exact amount needed to consolidate and permanently eliminate your loans.
To learn more about getting a debt consolidation loan in Toronto from the GTA’s leading home equity finance provider, go to alpinecredits.ca.