Red Deer Mortgage Broker
Red Deer Mortgage Broker

Red Deer Mortgage Equity Line of Credit?


A Line of Credit is simply an approved loan that you can access when you need it. You can use a line of credit for down payment on a new home purchase. If it is a secured line of credit or HELOC it is viewed as own resources. If you do not have a home and want to access an unsecured line of credit for down payment we can get this done as a borrowed down payment program called a flex down mortgage. This is used when you do not have a down payment and want to buy a home.

A Home Equity Line of Credit or HELOC is a line of credit secured by your home. You can use the funds any way you want. The money could be used to contribute to your RESP or RRSP. Home equity lines of credit are often used for renovating the home that the loan is secured by. Others use the money to consolidate debt or pay for another property. For example, you might borrow against your home via a HELOC to buy a cottage or investment property. You’ll pay a lower interest rate than if you’d pay with the mortgage rates charged on second homes and raw land where you hope to build your dream home.

The greatest benefit of the HELOC is the very low interest rates. Red Deer mortgage brokers at Whalen Mortgages are ready to help you understand your options. Contact us for the lowest Red Deer mortgage rates on your HELOC. 

Because a HELOC is backed by your home, the interest rate is far lower than an unsecured line of credit. However, the interest rates and loan terms vary between HELOC lenders. Talk to a Red Deer mortgage brokers to guarantee that you get the best rate on this mortgage product.

Why are HELOCs so attractive? Investors can access their own home equity to buy a new property instead of trying to raise capital. The self-employed benefit from HELOCs, too, whether they use the money to fund their new venture or consolidate debt that they’d otherwise have to pay high interest rates on.

A side benefit of a HELOC is that you have a fully open mortgage. You can pay it down as much as you want at any time. Nor do you have to worry about losing access to the money. You can re-draw the funds at any time without penalty. The only limit is literally the HELOC credit limit. This is similar to your credit card limit but at a lower interest rate. You won’t pay interest on the available credit that you don’t use. And you can set up a home equity line of credit where you only pay interest on the loan balance, an invaluable tool for keeping monthly expenses low while you grow your business or get control of your finances.

What are the downsides of a HELOC? This type of loan is secured by your home’s title. If you don’t own your home or other piece of property, you can’t get a HELOC. Furthermore, the HELOC cannot be transferred to a new lender. You can refinance the HELOC loan, but this comes with legal fees to change the title as well as loan origination fees. This is a very different process than renewing or refinancing your existing mortgage, since the HELOC is a separate collateral mortgage. However, once you have a HELOC, you can keep it in place for as long as you own the home. If you pay off the loan and then need access to the money later, you simply write a check off the HELOC. There is no need to apply for an additional loan. Call your Local Mortgage Experts in Red Deer to find the lowest cost HELOC available.

There are rules regarding HELOCs in place to protect both you and the lender. For example, you can only borrow up to 65% of the value of the property. A HELOC can be converted into a regular mortgage or rolled into a new mortgage as long as the required level of home equity is maintained. All you have to do is make a phone call to your Trusted Red Deer mortgage specialist at Red Deer Whalen Mortgages.



Contact one of our highly qualified Red Deer mortgage professionals today to see if a HELOC is right for you!

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