Anyone has any Experience with BMO's Homeowner Readiline?Need help!

guys, plz help me ..i am really confused!!! Million thx!

It's basically a large line of credit that is secured using the equity in your home.

If you were say approved for a $20,000 mortgage (for simplicity) and you pay $1000 each month and the interest was 0% (again for simplicity). Each month you reduce the balance by $1000. So ofter 5 months you would have $15,000 remaining. Now say you want to buy another house for $20,000, you will need to apply for another mortgage.

Now Readiline you have $100,000. You buy a $20,000 house, he issues a draft for $20,000. For simplicity we'll say the interest is also 0%. Each month you also pay $1000. After 5 months you would also owe $15,000. Now say you want to buy that 2nd house for $20,000 you will then have up to $85,000 available to you without applying for anything else. So simply advance another $20,000 and your total obligation is now $35,000. No additional application is needed.

Basically as you pay down your "mortgage" with a readiline that credit that you were approved for becomes available for use again. With a traditional mortgage once you pay it down, that's it.

You can use available credit from a Readiline to buy a home or for other borrowing needs, basically a LOC secured by your home.

Finally regarding interest payments, if you are allowed to pay-interest only then yes it is just interest only, that's the minimum monthly payment. If you want to reduce it further then you obviously need to pay more.

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Having said all that there are different ways to set it up, you really should talk to your lender on what he is placing you on.

When you buy a home what most likely will happen is it will be somewhat of a hybrid product. You will have a fixed "mortgage" payment like any other mortgage. But as mentioned as you pay that mortgage down, it becomes available to you again in the form of a Line of Credit. If you have interest only payments it would be the "Mortgage" portion + Any Interest

tkyoshi wrote: ↑It's basically a large line of credit that is secured using the equity in your home.

If you were say approved for a $20,000 mortgage (for simplicity) and you pay $1000 each month and the interest was 0% (again for simplicity). Each month you reduce the balance by $1000. So ofter 5 months you would have $15,000 remaining. Now say you want to buy another house for $20,000, you will need to apply for another mortgage.

Now Readiline you have $100,000. You buy a $20,000 house, he issues a draft for $20,000. For simplicity we'll say the interest is also 0%. Each month you also pay $1000. After 5 months you would also owe $15,000. Now say you want to buy that 2nd house for $20,000 you will then have up to $85,000 available to you without applying for anything else. So simply advance another $20,000 and your total obligation is now $35,000. No additional application is needed.

Basically as you pay down your "mortgage" with a readiline that credit that you were approved for becomes available for use again. With a traditional mortgage once you pay it down, that's it.

You can use available credit from a Readiline to buy a home or for other borrowing needs, basically a LOC secured by your home.

Finally regarding interest payments, if you are allowed to pay-interest only then yes it is just interest only, that's the minimum monthly payment. If you want to reduce it further then you obviously need to pay more.

======

Having said all that there are different ways to set it up, you really should talk to your lender on what he is placing you on.

When you buy a home what most likely will happen is it will be somewhat of a hybrid product. You will have a fixed "mortgage" payment like any other mortgage. But as mentioned as you pay that mortgage down, it becomes available to you again in the form of a Line of Credit. If you have interest only payments it would be the "Mortgage" portion + Any Interest

thanks

anyone ?please!!!

NismoS wrote: ↑my lender told me that for my readiline, i will only have the revolving portion of $100,000, which means i won't be having any fixed mortgage payments every month. that's where i got confused....let's say i borrow $50,000 out of that $100,000, and my interest expense will be $150 ...so do i just pay this 150 buck every month??? or am i allowed to pay more??? cus i don't wanna just pay the interest only, i wanna pay more money to reduce my principle..not just the interest.. am i allowed to do so ?

As for the interest rate they charge, the guy in bmo branch told me that it's 3.5%(P+1%), but people in BMO telephone banking told me that it's 4.0%(which is P+1.5%)...why were they telling me the different rate??? how's going on here?

thanks for providing the info !!!

You can pay whatever you want. The *minimum* payment to be considered in good standing is the interest only. As a LOC you may make any payments of any amount at anytime.

tkyoshi wrote: ↑You can pay whatever you want. The *minimum* payment to be considered in good standing is the interest only. As a LOC you may make any payments of any amount at anytime.

thanks buddy!

tkyoshi wrote: ↑It's basically a large line of credit that is secured using the equity in your home.

If you were say approved for a $20,000 mortgage (for simplicity) and you pay $1000 each month and the interest was 0% (again for simplicity). Each month you reduce the balance by $1000. So ofter 5 months you would have $15,000 remaining. Now say you want to buy another house for $20,000, you will need to apply for another mortgage.

Now Readiline you have $100,000. You buy a $20,000 house, he issues a draft for $20,000. For simplicity we'll say the interest is also 0%. Each month you also pay $1000. After 5 months you would also owe $15,000. Now say you want to buy that 2nd house for $20,000 you will then have up to $85,000 available to you without applying for anything else. So simply advance another $20,000 and your total obligation is now $35,000. No additional application is needed.

Basically as you pay down your "mortgage" with a readiline that credit that you were approved for becomes available for use again. With a traditional mortgage once you pay it down, that's it.

You can use available credit from a Readiline to buy a home or for other borrowing needs, basically a LOC secured by your home.

Finally regarding interest payments, if you are allowed to pay-interest only then yes it is just interest only, that's the minimum monthly payment. If you want to reduce it further then you obviously need to pay more.

======

Having said all that there are different ways to set it up, you really should talk to your lender on what he is placing you on.

When you buy a home what most likely will happen is it will be somewhat of a hybrid product. You will have a fixed "mortgage" payment like any other mortgage. But as mentioned as you pay that mortgage down, it becomes available to you again in the form of a Line of Credit. If you have interest only payments it would be the "Mortgage" portion + Any Interest

Tkyoshi, is the difference between this and a HELOC the fact that the BMO Readiline is a LOC given in advance under the condition that a property will be purchased in the near future? So this Readiline is good for property investors (to help with the initial downpayments)?

Do any other big banks offer a similar loan structure?

bump

bump

I just recently setup a BMO Readiline, about a month ago, at that time my mortgage specialist told me that there was talk of changing the open variable rate (line of credit portion) to P+1.5% or even P+2.0%, it is quite likely that your mortgage specialist you have been dealing with has been able to hold the rate at P+1% if you get it done right away as apposed to the new P+1.5% rate.

Just guessing though.

acanaman wrote: ↑I just recently setup a BMO Readiline, about a month ago, at that time my mortgage specialist told me that there was talk of changing the open variable rate (line of credit portion) to P+1.5% or even P+2.0%, it is quite likely that your mortgage specialist you have been dealing with has been able to hold the rate at P+1% if you get it done right away as apposed to the new P+1.5% rate.

Just guessing though.

so u mean the BMO changed the readiline rate from P+1 to P+1.5 recently?

and there's one more thing, the person i am dealing with said he will only open the revoloving portion for me,no installment portion....how does that work?any ideas?

alanbrenton wrote: ↑Tkyoshi, is the difference between this and a HELOC the fact that the BMO Readiline is a LOC given in advance under the condition that a property will be purchased in the near future? So this Readiline is good for property investors (to help with the initial downpayments)?

Do any other big banks offer a similar loan structure?

Actually if you own your own home right now you can get a Readiline, you'll secure it with your home. But really the bottom line is Readiline can be combined like a Mortgage. So you have your set monthly mortgage payment and as you pay that down it becomes a LOC. So it's a "convertable" mortgage --> LOC i suppose you can say.

But yes it can be used to purchase a second property, it acts like a regular LOC so you can buy a Car, go on vacation, whatever you like.

Also with the set mortgage payment when interest rates fluctuate your payment for the mortgage portion will stay the same like a normal mortgage.

As far as I'm aware this appears to be a unique product to BMO. Just like how their banking plans can cover up to 20 accounts and only the 1st account needs to maintain the minimum balance to waive it for all the accounts.

tkyoshi wrote: ↑Actually if you own your own home right now you can get a Readiline, you'll secure it with your home. But really the bottom line is Readiline can be combined like a Mortgage. So you have your set monthly mortgage payment and as you pay that down it becomes a LOC. So it's a "convertable" mortgage --> LOC i suppose you can say.

But yes it can be used to purchase a second property, it acts like a regular LOC so you can buy a Car, go on vacation, whatever you like.

Also with the set mortgage payment when interest rates fluctuate your payment for the mortgage portion will stay the same like a normal mortgage.

As far as I'm aware this appears to be a unique product to BMO. Just like how their banking plans can cover up to 20 accounts and only the 1st account needs to maintain the minimum balance to waive it for all the accounts.

Thanks for the info Tkyoshi.