More popularly referred to as an add-on mortgage or a second mortgage, a home equity loan is essentially a subordinate mortgage secured against an already obligated property. Since your house will be taken as collateral to provide both, you may lose the ownership of your home in case you do not or are unable to pay off either of them.

A home equity mortgage is best suited to those who require cash but do not wish to sell their property and a borrower may obtain as much as the amount left after deducting the cost of his or her first home loan from that of the second one. In general, home equity loans in Canada are often leveraged by homeowners to finance expenses that are expected to increase their property value in the real estate market, such as the cost of constructing a new bedroom or renovating a kitchen in one’s house.

However, they are seldom utilized for paying for college tuition or settling credit card debt, and when you apply for one, a one-time lump sum amount will be disbursed to your credit account post approval. You should also keep in mind that both your first and second mortgages must be repaid every month.

Call us now for any queries or further information on how you may benefit by obtaining a home equity loan from Royal King Mortgages!