Investing

Smith Maneuver.....HELOC lender different than Mort. Broker

  • Last Updated:
  • Feb 14th, 2017 11:04 am
[OP]
Deal Addict
Jan 3, 2013
2027 posts
287 upvotes
Sidney

Smith Maneuver.....HELOC lender different than Mort. Broker

Couple questions, can the Smith Maneuver be done when the HELOC lender and the Mortgage lender are different institutions (ie Mortgage from CIBC, HELOC from TD)? Also, does the mortgage have to be readvanceable for the Smith Maneuver to work?
6 replies
Deal Fanatic
User avatar
Dec 14, 2010
5697 posts
6120 upvotes
Every bank offers Smith Maneuver products, but they're coupled with mortgage and revolving HELOC. I don't think it can be done separately.

Yes, you must get a re-advanceable mortgage, so your HELOC can grow by the principal amount every time you pay your mortgage. Otherwise, your HELOC will never grow unless you do a house appraisal.

Check your options with your current bank, regarding converting your mortgage to a SM product. There might be penalty involved, but if at the end of the term your mortgage is smaller with SM (given the extra payments that can be done with dividends, for example) it's worth it as it reduces your bad debt while it grows your good debt.

CIBC SM product is Home Power Plan and TD SM product is called TD Heloc.

Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

Trading strategy based on Graham principles.
Deal Addict
User avatar
Sep 19, 2013
2196 posts
705 upvotes
Winnipeg
I dont have HELOC, but I have done some reading on Smith M and wish to start soon. I have some information that can be useful to you -
You can definitely get a HELOC from other lender, but I am almost certain it wont be re-advanceable. HELOC is just a HELOC. With Smith M products, the HELOC portion becomes re-advanceable because they control HELOC limit based on your mortgage payments. With different lenders, that information is not automatically relayed. But you can call the other lender and manually increase the limit every few months, once you have significant increase. I believe they will have to run your credit report but I am not sure here. The total mortgage+HELOC cannot go over 80%, and the HELOC only cannot go over 65% of appraised value. Also, there are certain policies for HELOC lenders as to which mortgage lender they will go behind because HELOC lender will be 2nd priority if you default. Let me know what you find.
In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move. -- Douglas Adams
Deal Guru
User avatar
Aug 8, 2012
10198 posts
3978 upvotes
BC
Links using page numbers don't work for people using different # posts per page. What is your page 901 is my 2402 :)

This format should work for anyone:
https://forums.redflagdeals.com/viewtop ... p=27453305
POLL: How frequent is your RRSP-matching?
Plastiq: Pay any bill with credit card for 0-2.5% fee (help meet min spending and keep old cards active!)
Rewards program transfer times (e.g. SPG->Aeroplan, Marriott->SPG, Amex MR->SPG...)
Deal Addict
User avatar
Sep 19, 2013
2196 posts
705 upvotes
Winnipeg
ace604 wrote: Links using page numbers don't work for people using different # posts per page. What is your page 901 is my 2402 :)

This format should work for anyone:
https://forums.redflagdeals.com/viewtop ... p=27453305
I tried to link to the post. I clicked on the # post number and then copied the link from the address bar. Here is what I tried to link it to -
.......................official-mortgage-rates-thread-351105/901/#p27453305

But still looks like there is page number in the link...Disappointed But Relieved Face

But in your link, there is no mention of page #.
In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move. -- Douglas Adams
Deal Guru
User avatar
Aug 8, 2012
10198 posts
3978 upvotes
BC
amitdi wrote: I tried to link to the post. I clicked on the # post number and then copied the link from the address bar. Here is what I tried to link it to -
.......................official-mortgage-rates-thread-351105/901/#p27453305

But still looks like there is page number in the link...Disappointed But Relieved Face

But in your link, there is no mention of page #.
Yes, that was my point. The "/viewtopic.php?p=<post number>" format works universally while the "/thread-name/<page number>/#p<post number>" format only works for people who have chosen the same # of posts per page as you have.

This is thanks to the new 'improved' RFD.
POLL: How frequent is your RRSP-matching?
Plastiq: Pay any bill with credit card for 0-2.5% fee (help meet min spending and keep old cards active!)
Rewards program transfer times (e.g. SPG->Aeroplan, Marriott->SPG, Amex MR->SPG...)

Top