We have already discussed the various benefits for homeowners to get a HELOC Toronto [HELOC Toronto – Citadel Mortgages HELOCs are an incredibly efficient and easy way for homeowners with substantial equity in their properties to access money. Although the line of credit maximum limit is 65% of the home’s value, this still represents approximately over $500k in available cash for the average Toronto-area house. Often people who are seeking to consolidate debt need access to these funds quickly. One question that comes up in the HELOC discussion is how long it will take to get one. Fortunately, it’s not as long as you might think!
Have The Proper Documents
The number one cause for delay in opening up a home equity line of credit is not having all the right documents. If it has been a significant amount of time since you applied for a mortgage, you might not remember all the paperwork involved. While the paperwork to get a HELOC is not quite as large as the first mortgage, it is still reasonably intensive. Banks need to verify three critical pieces of information. First, they need to see that the house is worth enough to extend you the line. Second, banks need to be satisfied that you can pay back the line of credit. Finally, they need to see that you have sufficient equity in the property.
The first piece of information is satisfied by an appraisal. Banks will order this examination as part of your application. The assessment takes a little bit of time. The person must come out, see your property, and submit a report. They will need to compare your property against other comparable properties in the neighbourhood. Typically this process takes about a week or two, but sometimes banks can get it done sooner. It is worth noting that if you are applying for a HELOC very shortly after your first mortgage, it is sometimes possible to use that value. In turn, this allows you to bypass the appraisal altogether.
The second piece of information is satisfied by your track record of employment. Be prepared to provide evidence of work going back a couple of years. Banks like to see consistency. They will normalize any egregious amounts – good or bad – and take the overall average. As an example, if you crushed it last year and made a $200k bonus that’s atypical, that will be discarded in your loan repayment calculations. However, if that $200k bonus is typical, then banks will count that amount. Please be advised that they will ask to see around three years of pay stubs to verify the amount is, indeed, typical.
It’s worth noting that mortgage brokers serve an incredibly critical function concerning income verification. A mortgage broker can help you understand what documentation you need to provide and if the amounts will be sufficient for the requested line of credit. Your mortgage broker can collect all of this information, review it, and let you know if they think additional documentation will be required.
Last but not least, banks need to verify that you do have equity in the property. You can help banks check this by providing information about any existing mortgages or other lines of credit on your property. These mortgages will come up in your credit report of course, but providing the bank with the most recent information is one way to help expedite your application. Providing this information is especially critical if you have a more complex situation such as multiple mortgages on your file due to rental properties. Again, a mortgage broker can help you work through any issues with this type of documentation.
How Long Does Getting A HELOC Take?
For the Toronto market, getting a HELOC typically takes at least two weeks, but it shouldn’t be more than four. Most of this time is due to the banks needing to complete their verifications. They need to send out an appraiser. That can take time. The results need to come back. Then if everything squares up, the line of credit can usually be issued pretty quickly. If there is a tricky circumstance, like the appraiser valuing the home for less than you would want, then you can count on some extra delays.
As is the case with most mortgage-related products, a Toronto-area mortgage broker, like Citadel, can help you navigate the complex world of HELOCs. We make sure you get yours as quickly as possible. Having multiple lenders makes the process significantly quicker because when you have TD, Manulife, and other banks vying for your business, they tend to move quickly. You can also select the bank that can close the fastest if you need the money ASAP.
A HELOC Toronto is an incredible financial tool to allow you to consolidate debt, improve your property, or fund that vacation you’ve always wanted. The best part is that even with all the paperwork that you will need to submit and sign, you can still close on the deal within a couple of weeks or so. If you’re looking to pay off debt quickly, don’t obtain a personal loan assuming that it will take too long to get a HELOC. Personal loans usually have an egregiously elevated interest rate compared to a HELOC. Chances are you’ll be able to get the line of credit you want in a timeframe you didn’t think was possible!
By using a mortgage agent or mortgage broker from Citadel Mortgages, you will be able to ask all the questions you have and be ensured you get the best advice and mortgage product for your mortgage needs. Contact us here at Citadel Mortgages to become mortgage-free sooner!
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