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  1. #1
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    Default School me on HELOC's

    I know a lot of ballers here have a HELOC. I just recently bought a place and I'm looking at just getting rid of my current vehicle payment by getting a HELOC. So, school me. Can this only be done with the bank I got my mortgage through, OR can I do this with say RBC who I'm with?

    Pros, cons? Give me some insight as to what the best options are here for me. Is there a certain amount of time I have to wait before I'm able to get one?

    I figure I'd get some insight here first before I call the Bank on Tuesday when they are open again.

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    You just bought the house? How much equity is in the house?
    It's easier getting the heloc from your current mortgage company. But only if you've got decent equity.

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    Default Re: School me on HELOC's

    Originally posted by Shlade
    I know a lot of ballers here have a HELOC. I just recently bought a place and I'm looking at just getting rid of my current vehicle payment by getting a HELOC. So, school me. Can this only be done with the bank I got my mortgage through, OR can I do this with say RBC who I'm with?

    Pros, cons? Give me some insight as to what the best options are here for me. Is there a certain amount of time I have to wait before I'm able to get one?

    I figure I'd get some insight here first before I call the Bank on Tuesday when they are open again.
    Let the King of HELOCs take this one.

    - Yes through your bank or any other bank

    - Pros:

    - Low interest rate. I believe it's 3.5% right now.
    - Minimum payment is interest only.
    - It's accessible immediately. Use it like a chequing account
    - Consolidate higher rate cards

    - Negatives:

    - Too easy to spend. People have no self control.

    Anyway, I think the basic HELOC math still applies.

    Property value x 65% less current mortgage = HELOC

    So as long as you have equity in the property you are good to go. It's really handy.

    Originally posted by rage2
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    Default Re: Re: School me on HELOC's

    Originally posted by max_boost


    Let the King of HELOCs take this one.

    - Yes through your bank or any other bank

    - Pros:

    - Low interest rate. I believe it's 3.5% right now.
    - Minimum payment is interest only.
    - It's accessible immediately. Use it like a chequing account
    - Consolidate higher rate cards

    - Negatives:

    - Too easy to spend. People have no self control.

    Anyway, I think the basic HELOC math still applies.

    Property value x 65% less current mortgage = HELOC

    So as long as you have equity in the property you are good to go. It's really handy.


    Perfect. Pretty much exactly the answer I needed!

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    Like MB said, it's readily available once approved by bank and it is good option to consolidate higher interest rate debt.

    My question is Have you gotten the appraisal done on your place yet? You might not be able to get what you think you can get depending on the current appraisal value.

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    Default

    ...
    Last edited by Sugarphreak; 08-16-2019 at 02:38 PM.

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    Default Re: Re: School me on HELOC's

    [i]

    Anyway, I think the basic HELOC math still applies.

    Property value x 65% less current mortgage = HELOC

    So as long as you have equity in the property you are good to go. It's really handy.

    [/B]

    Isn't it 80% combined with current mortgage?

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    Default Re: Re: Re: School me on HELOC's

    Originally posted by Escape



    Isn't it 80% combined with current mortgage?
    I think that changed earlier this year or last.

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    Originally posted by Sugarphreak
    HELOC's are great to get your loan paid off quickly

    One of the tricks I used to use was deferring interest by putting my savings in it.

    For example; every year I send a bit of money to my wife's parents overseas, I save up for my vacations, and I have some dedicated savings for cars and parts... by putting it all into the HELOC, it saves me the interest on that amount of money, and I can take it out freely when I needed it.

    If I had just shoved that money into a high interest account, I wouldn't have gotten the same return as the HELOC, plus any money I did earn in interest would then be taxed.


    As Max said, if you are good with money.... they are an awesome financial tool. If you can't control your spending, they are the devil.
    So you had a positive balance as oppose to a neg or even??

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    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
    Originally posted by rage2
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    ^got it! Thanks for the insight boys I'll give the bank a call Tuesday

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    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
    So much simpler to set it up at the time of the initial mortgage, but if it's the same company that has your current mortgage, there should be no requirement for appraisal.
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    I was told 80% of the equity, and in my case they told me they'd value my house at city assessment plus $20k. Then they told me I could go fuck myself since I'm self employed, and to try again in two years.
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    Default

    ...
    Last edited by Sugarphreak; 08-16-2019 at 02:39 PM.

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    Originally posted by Sugarphreak


    I am not sure what you mean? That is probably my bad though, I don't think my post was super clear.

    Say "Joe" needs a home equity loan to get rid of his remaining mortgage for say 80K. First thing is he instead gets one for 100K or even 120K, and uses only 80K of it. This way he has an extra buffer of cash for emergencies (or new cars, haha).

    Then say Joe goes on Vacation every year and he puts away about 5000$ a year for that, and he also saves 10K for his RSP at the end of each year, and he also tries to put away an extra 15K in savings... instead of putting it in a bank account where he will get 1.5% interest until he needs it (and then also have to pay taxes on that 1.5%), he instead stuffs it into his HELOC temporarily. That money is then reducing his interest cost (which would have been whatever the HELOC rate is, so say 3%). There is no taxes on reducing interest, so he is fully realizing the 3% interest savings.

    Basically, the benefit of putting his money into the HELOC temporarily is 2 or even 3 times better than saving it in another account outside.

    It isn't even just that... when I had my HELOC, I just had my paychecks go right into it. That immediately satisfied the minimum payment every month. Then I would use my credit card for everything all month, and only pay it right before the due date... so the money that I would have spent on groceries, gas, and other things was also sitting in the HELOC temporarily, reducing my interest every month.


    At the end of the day, I just found it exceptional easy to get my HELOC paid off with how flexible it was. My problem with my current mortgage is I can only pay in up to 20% per year... and once I pay it in, I can never use that money later on in case I have an emergency. So to have any kind of buffer, I need to keep a bunch in a low interest savings account instead, and then the government takes their share of any interest I make on it.
    at the end of the day, a heloc is a secured loan... is more flexible than a mortgage; however its a loan

    Paying down a loan is not a savings or investment vehicle.

    in this current economic climate, I can tell you that there are many couples, often with one or both unemployed, who are suffering now from being over leveraged with substantial negative equity...

    my friend who is a partner at Bennett Jones has been telling me that its been a record year for divorces and often they are incredibly messy and non-amicable.

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    There's more than one kind of HELOC being discussed here it seems.

    There is the "traditional" Mortgage plus HELOC situation, where the two products, even if they are from the same lender, are NOT connected.

    Then there is the "all-in-one" type, where your entire mortgage is basically "within" the HELOC. "Manulife one" are of this type, although there are others who provide this.

    I'm pretty sure the OP was talking about the first kind, and Sugarphreak is talking about the second kind.
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    This has me thinking as our mortgage is up for renewal in July.
    I can get a 5 year fixed right now at 2.70% with our current lender and a HELOC at 2.95% revolving rate through our FA.
    Assuming the spread stays the same from now until July I wonder if I might be better off paying the mortgage off at renewal time with a new HELOC and do all our banking through the HELOC-deposit all income into it to save interest and withdraw using an available banking card (kinda like Manulife One).
    Goal is to pay off the house as soon as possible not to buy toys!

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    The all in one type HELOC-mortgages can be incredibly powerful tools. If done right, you make hundreds of tiny mortgage pre-payments each year, without really trying.

    I don't have one, but I can see the appeal.
    Quote Originally Posted by killramos View Post
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    Originally posted by ianmcc
    This has me thinking as our mortgage is up for renewal in July.
    I can get a 5 year fixed right now at 2.70% with our current lender and a HELOC at 2.95% revolving rate through our FA.
    Assuming the spread stays the same from now until July I wonder if I might be better off paying the mortgage off at renewal time with a new HELOC and do all our banking through the HELOC-deposit all income into it to save interest and withdraw using an available banking card (kinda like Manulife One).
    Goal is to pay off the house as soon as possible not to buy toys!
    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%

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    Originally posted by ianmcc
    This has me thinking as our mortgage is up for renewal in July.
    I can get a 5 year fixed right now at 2.70% with our current lender and a HELOC at 2.95% revolving rate through our FA.
    Assuming the spread stays the same from now until July I wonder if I might be better off paying the mortgage off at renewal time with a new HELOC and do all our banking through the HELOC-deposit all income into it to save interest and withdraw using an available banking card (kinda like Manulife One).
    Goal is to pay off the house as soon as possible not to buy toys!
    yes you can if you want that flexibility. I did it like this for many years.

    Glad to see beyond has come around on the Heloc haha
    Originally posted by rage2
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