School me on HELOC's

[ianmcc]

Originally posted by Shlade


Who are you with? I just got 2.44% through first Calgary on a fixed 5 year. Should do some shopping around you'd be able to get a better deal than 2.70%

That's their posted rate for comparison sake.
just using them to compare the percentage difference between a conventional mortgage and a HELOC.
Anyone know of a better rate on a HELOC than 2.95%

[Sugarphreak]

...

[03ozwhip]

Originally posted by max_boost
They might try to ding for you appraisal and or legal fees $500-750? tell them to suck it and you'll go elsewhere. Banks make billions so fk those guys lol

Ive never heard of this, I thought it was mandatory to pay for this? am I wrong? or are there stipulations to it? I know for one HELOC I had, it was on a brand new house and I didn't need one, but the other one wasn't and I had to pay for one....did I answer my own question here? lol

[Buster]

Using the HELOC in place of your mortgage (as your primary source of liquidity day-to-day) has the downside that these products are generally somewhat more expensive than term loans.

[Xtrema]

Originally posted by 03ozwhip

Ive never heard of this, I thought it was mandatory to pay for this? am I wrong? or are there stipulations to it? I know for one HELOC I had, it was on a brand new house and I didn't need one, but the other one wasn't and I had to pay for one....did I answer my own question here? lol

Yup, you just answer your own question.

But usually if you get the HELOC from the same company that you have your mortgage thru, it's should be free. They already have all the numbers and already did the assessment when you got your mortgage.

Originally posted by Buster
Using the HELOC in place of your mortgage (as your primary source of liquidity day-to-day) has the downside that these products are generally somewhat more expensive than term loans.

May not be a bad idea if don't have much owing left. But what other term loans would cost less than HELOC and mortgage?

[JfuckinC]

Originally posted by max_boost
Anyway, I think the basic HELOC math still applies.

Property value x 65% less current mortgage = HELOC

What? Can you put that into hypothetical numbers for me? lol

I've been wondering about a heloc to put some debt in one place.. But I don't understand the requirements/what's available compared to equity. My financial knowledge and understanding is subpar lol... Thanks.

[max_boost]

Legal docs are in house I'm sure the bank has a template and they just type the stuff in. Appraisal they can definitely eat it lol I have never paid for one but it was a buddy who set mine up (twice) and for my parents as well.

JfuckinC

$500k house x 65% = 325,000

325,000 subtract your mortgage balance say $200,000

Heloc = 125k

You are basically borrowing your own money. It's handy for a 100 different reasons

[JfuckinC]

Originally posted by max_boost
Legal docs are in house I'm sure the bank has a template and they just type the stuff in. Appraisal they can definitely eat it lol I have never paid for one but it was a buddy who set mine up (twice) and for my parents as well.

JfuckinC

$500k house x 65% = 325,000

325,000 subtract your mortgage balance say $200,000

Heloc = 125k

You are basically borrowing your own money. It's handy for a 100 different reasons

Ok, I get it, so you need a pretty good chunk of equity for this to be applicable. I've got a decent amount but I don't think its enough.

Thanks man.

[blownz]

Did it recently drop to 65%? Mine has been 80% for years and I just checked and it hasn't changed.

[Xtrema]

Originally posted by blownz
Did it recently drop to 65%? Mine has been 80% for years and I just checked and it hasn't changed.

Since 2014.

[blownz]

That is odd, I just checked and mine is still the same as it was 5 years ago at 80%.

[Rarasaurus]

I did not know this either but the rules did change in 2014. Old accounts got grandfathered at 80%. Just did a quick search.

[tpurcell4]

Originally posted by blownz
That is odd, I just checked and mine is still the same as it was 5 years ago at 80%.

The rule change really only affected lines of credit placed since the rule changed in November 2014. If you had a line of credit previously then you would not be affected yet. If you ever need to make changes to the HELOC amount then you would be under the new rules.

[tpurcell4]

Originally posted by ianmcc


That's their posted rate for comparison sake.
just using them to compare the percentage difference between a conventional mortgage and a HELOC.
Anyone know of a better rate on a HELOC than 2.95%

Two scenarios to get a HELOC better than 2.95% (2.70% HELOC):
1. Be a doctor, Dentist or Veterinarian, or
2. Have In excess of $1,000,000 in various deposits and investments with one bank (the more you have with them the more likely you are to get better rates), you may need to pay for their private banking services. This does not guaranty better rates with every institution, but you are more likely to get special exceptions for better rates and terms (think of it as the bank is lending you your own money back at this point).

[Lex350]

I signed my HELOC back in may. My rate is 2.2% but I don't didn't have a mortgage on the house. It was paid off.

[tpurcell4]

Originally posted by Lex350
I signed my HELOC back in may. My rate is 2.2% but I don't didn't have a mortgage on the house. It was paid off.

That would make sense as well. If you have your mortgage completely paid, then providing a HELOC, even at a low rate means the bank has the opportunity to re-lend the money to you. This would essentially fall under the same as the 2nd exception for lower rates. When you do not need the money, it is abundant and inexpensive.

[Escape]

Originally posted by Rarasaurus
I did not know this either but the rules did change in 2014. Old accounts got grandfathered at 80%. Just did a quick search.

Heloc+mortgage is 80% right?

[jwslam]

Originally posted by blownz
Did it recently drop to 65%? Mine has been 80% for years and I just checked and it hasn't changed.

Originally posted by Xtrema
Since 2014.

Then TD needs to get on updating their website

I see 80

https://www.tdcanadatrust.com/produc...-your-home.jsp

[JoniBoy]

My understanding is your HELOC portion can only be up to 65% of the home value however HELOC + mortage can still be up to 80% of the home value.

I currently have this through RBC's Homeline plan - I refinanced a rental with a mortgage at 80% of the appraised value and every month as the principal is paid down, my line of credit increases by that same amount, so that the total (available HELOC + remaining mortgage) remains constant at 80% of the home value. This continues until the HELOC portion reaches 65% of the home's value at which point it maxes out.

I did this refinance in July of 2015 well after the new rules had come into effect so I'm quite certain this is how it works but perhaps Todd or Tim or anyone else in the know can confirm?

[Xtrema]

Ok, to clear up the confusion, look at this link:

http://www.fcac-acfc.gc.ca/eng/resou...mprunte-1.aspx

Example 3.

Yes, you can borrow 80% of assessed value (mortage+Heloc), given that Heloc is under 65% of the assessed value.