News   GLOBAL  |  Apr 02, 2020
A Message to Our Readers
 8.8K     0 
News   GLOBAL  |  Apr 01, 2020
EarthCam Time-Lapse Documents Rafael Viñoly-Designed New Stanford Hospital Construction
 40K     0 
News   GLOBAL  |  Apr 01, 2020
Resort Town
 5.1K     0 

luxome

luxome

Active Member
Member Bio
Joined
Feb 19, 2009
Messages
517
Reaction score
0
Do you guys think it's wise to take HELOC to invest in Pre-construction property that won't be complete until June 2012?

Also, I have a mortgage broker that i deal with. However, i would like to know if the HELOC rates will be lower if i just walk into a local bank branch? or will i likely have the lower rate if i go with my mortgage broker (have her shop around for me like a mortgage?) or are the rates pretty standardized and not negotiable?
 
luxome said:
Do you guys think it's wise to take HELOC to invest in Pre-construction property that won't be complete until June 2012?
Click to expand...

For investment or personal use? I think a HELOC is a great way to get equity out of your home so you can apply it to something else.

As to whether pre-construction will see a price gain making an investment worth while; that's between you, your number cruncher, and your fortune teller.
 
rbt said:
For investment or personal use? I think a HELOC is a great way to get equity out of your home so you can apply it to something else.

As to whether pre-construction will see a price gain making an investment worth while; that's between you, your number cruncher, and your fortune teller.
Click to expand...

investment.
 
I agree, investment. But don't count on making any equitable gains by 2014 if you're in dt TO and paying 600/ft for your property. Until resale prices match it, nobodies making anything on preconstruction.
 
so are HELOC rates standard from bank to bank or is it negotiable like Mortgage rates?
 
Maybe I am prejudice on Heloc, but this seems to be another form of leveraging. Rates maybe attractive, but are there strings attached? Will they raise rates depending on economic conditions (or as they see fit)?

http://www.calculatedriskblog.com/2009/06/foreclosures-and-home-atm.html

Again, I don't know much about Heloc, or the difference between a conventional mortgage and Heloc (Canadian version). Please explain if anyone in this forum knows.
 
my mortgage broker got back to me and he said it is to do a Refinancing rather than going with HELOC. This makes me wonder if my mortgage broker is giving this advice for her own interest (e.g., greater commission).


Do mortgage brokers get paid to help clients get HELOC?

btw, what's the difference between HELOC and Secured LOC?

is Home Power Line of Credit (from CIBC) the same as HELOC at other banks?
 
Last edited:
I have a secured LOC through RBC, and my interest rate is prime.
The credit limit on the LOC goes up every week after I make my weekly mortgage payment on the property to which the LOC is secured.

For example: If you have a 200K mortgage and a 50K secured LOC, then you make a regular $1500 payment towards your mortgage, of which $500 is interest and $1000 is principal, the balances will change as follows:
Your mortgage outstanding will drop to 199K, and your secured LOC limit will increase to 51K.

My understanding is that all HELOC's and secured LOCs are tied to prime, they are never fixed-rate. I got my prime rate before the credit crunch, so maybe now it's prime plus some spread to get a secured LOC, not sure.
 
Last edited:
If you re-finance your broker will get paid based on the entire amount of your principal, and you may need to pay the interest differential or other fees. If you are going to go this route, I would shop around a few banks to see what kind of LOC you could get for a second mortgage on your property and compare the all-in results.

That being said, I would strongly caution you against doing this unless your existing house makes up a small portion of your net worth (i.e., you have many other investments). Otherwise you are just doubling-down on your RE bet, which is an awfully risky move. Chances are that you would be better off taking the money and putting in an RRSP, although there is risk in that too.

It all depends - do you feel lucky?
 
ok, my mortgage broker just got back to me saying she does not do Home Equity Line of Credit for clients (is it because there is no commission for them?) and says that if i do choose the HELOC route, it will affect my future home purchase. Why is that?

my mortgage broker is starting to annoy me and i don't feel like i'm priotized. i'm definitely going to be switching mortgage broker.
 
Last edited:
k, may be a stupid question but here it goes....but who knows, it may have been done before... :p

...is it possible to get HELOC on a pre-construction condo, even if it's a small amount??

can't i simply show them how much the prices have gone up based on the time i purchased and the current pricelist released by the builder??
 
argos said:
k, may be a stupid question but here it goes....but who knows, it may have been done before... :p

...is it possible to get HELOC on a pre-construction condo, even if it's a small amount??

can't i simply show them how much the prices have gone up based on the time i purchased and the current pricelist released by the builder??
Click to expand...


i doubt it since you don't officially own anything but the piece of paper, so where's the collateral?

they may be willing to offer you a unsecured LOC ...
 
You must log in or register to post here.

Back
Top