Tax Debt: Can a Home Equity Loan Help?
Falling behind on your tax payments? You're not alone. In fact, the Canada Revenue Agency (CRA) estimates that 1 out of 10 Canadians does not repay his or her tax debt on time. The good news is that there is a simple solution for settling your tax debt: taking out a home equity loan. Home equity loans allow you to access the equity that you've already built up in your home in order to pay off high-interest debt, complete renovations on your home, and even pay off the balance owing on your income tax account.
How Home Equity Loans Can Help
When you owe tax debt, the best thing you can do is pay it in full as quickly as possible. While in some cases you can make a payment arrangement with the Canada Revenue Agency to repay the amount owing, the arrangement could be cancelled if you miss a single payment. By borrowing against the equity in your home to pay your outstanding taxes in full, you avoid interest, penalties, and other financial and legal consequences -- such as having a tax lien placed on your home. Home equity loans also allow homeowners to consolidate all of their debts -- not just their tax debt -- into one, low-interest monthly payment.
These types of loans are issued as either adjustable- or fixed-rate loans with a repayment period of lasting between 5 and 30 years. While you'll need to pay closing costs, the payments for these loans are generally much less than those on a typical mortgage. Fixed-rate home equity loans offer the advantage of a regular, predictable interest rate, which allows borrowers to more easily manage their financial obligations.
How to Qualify
Home equity loans let you borrow a lump sum of money based on the value of your property and the amount owing on your mortgage. Our lending specialists help homeowners obtain your home loan as quickly and easily as possible. Contact us today to discuss whether a home equity loan is right for you.