Is this allowed, anyone done this?
If the property is cash flow positive enough to cover carry costs and HELOC payments would it make sense?
Is this allowed, anyone done this?
If the property is cash flow positive enough to cover carry costs and HELOC payments would it make sense?
My Karma ran over your Dogma
Pretty sure the first question they ask is did you borrow the money for the downpayment so I don't think you can anymore. Though maybe there's a way around that?This quote is hidden because you are ignoring this member. Show Quote
Kind of a lame source. But this was specifically addressed in CMHC rule change last year.
https://www.moneysense.ca/spend/real...e-to-covid-19/
No borrowed down payments.
I imagine if you had enough cash lying around to avoid CMHC, you wouldn’t be borrowing for your down payment. So likely where this starts and ends.
Originally posted by Thales of Miletus
If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
Originally posted by Toma
fact.This quote is hidden because you are ignoring this member. Show Quote
That link says you CAN use secured loans against owned property. This also makes the interest on your HELOC tax deductible.This quote is hidden because you are ignoring this member. Show Quote
The real ballers HELOC the entire purchase.
Sounds like the jury is out on whether this is allowable.
Anyone done this?
If allowed, is it a good idea?
My Karma ran over your Dogma
It’s not borrowed funds as your collateral is your own asset. You can do this, but for qualifying the amount is going to be amortized over 25yr at benchmark rate
Good idea? Well... who the hell knows, too many variables, depends what the future holds on a hell f a lot of things (vacancy rates, borrowing costs, property appreciation, etc)
One way to get absolutely fucked would be in a declining value/increasing overnight rates situation... variable on heloc increases... property it’s secured on doesn’t have enough equity to refinance into a lower fixed rate
Last edited by ercchry; 03-22-2021 at 10:35 AM.
A rental is not an insurable loan, so no CMHC... also there are two other insurers, so cmhc’s decisions are not a complete hard stopThis quote is hidden because you are ignoring this member. Show Quote
Everyone knows more leverage is smart. True for all types of assets.
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You can do it but as mentioned above, lots of risk with fully leveraging a rental property. I just had a client use their HELOC to buy a fourplex as a rental. Ultimately, its at the discretion of the bank/broker to make it work through whichever lender they use and your overall credit rating.
I'm using my HELOC to put a down payment on my next house and the bank knows. They do prefer a 20% down payment though if you have that available via the HELOC
Why not HELOC into div paying investment instead?
As long as the dividend is higher than the interest rate.This quote is hidden because you are ignoring this member. Show Quote
Probably better than a rental.
This quote is hidden because you are ignoring this member. Show QuoteDividends are irrelevant.This quote is hidden because you are ignoring this member. Show Quote
Fight me.
Yes you can. The lender will take that into account to calculate your TDSR.
Why wouldn't you leverage with that low interest rate. Unless you are looking to switch primary residence. Then it might hurt you in that scenario.
I'm not 65.This quote is hidden because you are ignoring this member. Show Quote
I don't buy a stock because of dividends.
But if this guy wants to... Enjoy!
Easy, investment loan tax deductible as well...This quote is hidden because you are ignoring this member. Show Quote