Getting a Secured Line of Credit With Bad Credit
A secured line of credit is just what it sounds like: a line of credit secured by collateral. This may be money or it could be equity in your home. Either way, you’re going to need to be able to put up something in exchange for the money that you need; here we’re going to talk about using equity in your home to get a secured line of credit. The application process is just like a mortgage. Let one of our smart Toronto mortgage brokers help you get the financing that you need to pay off your debts or make big ticket purchases.
What is a Secured Line of Credit?
This is a type of credit for people who just don’t have the best credit histories; if you have no credit at all, you may have to go this route. If you’re using one of these to buy a home they will hold equity in your house until you can pay the amount back. If you’re using these as part of a Canadian home equity loan, you’ll be borrowing against your home until youc an pay it back. Remember that you can’t borrow more than 70% of the worth of the home (they may go by the Appraised Repair Value if you’re going to use the line of credit to fix the house). This prevents borrowers from becoming “upside down” on their mortgages too quickly.
This is not a one time loan, it is a secured line of credit. This means that it operates like a credit card, allowing you to borrow, repay, borrow, etc. You’ll be able to get the money you need when you need it and repay it when you can. This type of financing is best used for big ticket purchases and one off large payments (like a debt payment), but you’ll want to be certain that you’re not losing more money than you’re paying off (e.g. paying off debt at 20% interest with a secured line of credit that has a 30% interest rate).
Can You Get a Secured Line of Credit?
Everyone is different, and there is really no way to tell if you can get a secured line of credit unless you come in and let us walk you through the process. We’ll help you fill out the paperwork, we’ll go over your credit and then we’ll help you find different lenders to see what is out there for you. Interest rates right now are the lowest they’ve been in decades, so you’ll want to make sure that you can get in on this golden age of mortgages before it’s all over.
If you have really bad credit, the good news is that you’re in the same boat as someone with poor to middling credit. You will need to put up part of your home to get this kind of secured line of credit, so let us help pair you with a great lender who will give you a fair deal today!
Also, visit our home equity line of credit page today to learn more! http://www.homebasemortgages.ca/home-equity-loans/line-of-credit/