Should I take equity out of my home to buy a car in Dundas?

Should I take equity out of my home to buy a car in Dundas?

Posted on August 15, 2022

If you have equity in your home and want to buy a car, you might consider taking some of the equity out of your home and using the proceeds from that loan to pay for the vehicle in full.

Before you make any snap decisions, we need to discuss the pros and cons of this decision and what steps you should take to make the most of your car-buying opportunity.

The real estate market in Canada is set for a major correction

The Canadian real estate market has experienced unprecedented growth, but it appears the market is due for a substantial correction.

When the correction begins, property values will drop, and that means the amount of equity you have available will also go down.

Before the correction starts, you could take out either a home equity line of credit (HELOC) or a simple second mortgage.

You will have to pay some upfront fees like an appraisal, but if the appraisal comes in where you need it to be, you could have access to financing at very low-interest rates.

There are a few risks that come with this approach; you are adding to the amount of money you owe on your home.

If for some reason, you are not able to repay your mortgage, it could put your home ownership in jeopardy.

Instead of taking that type of risk, you should consider going for a Dundas car loan.

The interest rate may be slightly higher than what you would pay on a home equity line of credit, the only asset at risk if you are not able to repay the loan is the vehicle.

Getting the most bang for your car-buying buck

Since we have established that you should opt for a traditional car loan, there are a few things you must do to ensure everything goes smoothly.

The first is to sign up for free credit monitoring so you are never caught by surprise inside your credit report.

You need to do everything within your power to boost your credit score so you can access the best terms.

To secure the best financing in Canada, your credit score should be higher than 680. If your score is below that amount but over 600, you can still get approved for a car loan.

The best place to get a superior car deal in Dundas

Anyone serious about getting a good deal on a new car in Canada should go through a local dealership.

These dealerships focus solely on auto financing, so they know all of the lenders in the Canadian market.

The dealership will be able to secure a deal with the best terms and help you save money; even if you have credit issues.

The dealership is still the best choice because they have tremendous negotiating power they can leverage with potential lenders.

So now that you know where to get a great deal on a new car, head over to your local dealership today.

Contact Unique Chrysler for help, advice and competitive Dundas car finance and leasing.

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