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Mortgage Renewal. Change or Stay. Other Products: RBC Homeline Plan or others ...

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  • Apr 3rd, 2013 2:02 pm
[OP]
Member
Mar 11, 2004
393 posts
96 upvotes
Ottawa

Mortgage Renewal. Change or Stay. Other Products: RBC Homeline Plan or others ...

Hi fellow RFD Members,

I am looking into getting this product or any other product that would help me take advantage of the home equity portion of my mortgage.

My mortgage is coming up for maturity in the 3 months.

Should I stay with RBC or switch to another bank that gives me better products.

I was able to negotiate 2.79 5yr fixed on the mortgage part.

They are offering RBC Prime + 0.5 on the Homeline portion which works out to be around $50,000 (Credit).

I don't know if this product will suit me or should I go to others like Manulife One or Scotia or BMO or TD.

Any help or advice would greatly be appreciated.
11 replies
[OP]
Member
Mar 11, 2004
393 posts
96 upvotes
Ottawa
I am hoping some financial planners will provide their advice.
Deal Addict
User avatar
Apr 6, 2008
1610 posts
125 upvotes
Toronto
deluxster wrote: Hi fellow RFD Members,

I am looking into getting this product or any other product that would help me take advantage of the home equity portion of my mortgage.

My mortgage is coming up for maturity in the 3 months.

Should I stay with RBC or switch to another bank that gives me better products.

I was able to negotiate 2.79 5yr fixed on the mortgage part.

They are offering RBC Prime + 0.5 on the Homeline portion which works out to be around $50,000 (Credit).

I don't know if this product will suit me or should I go to others like Manulife One or Scotia or BMO or TD.

Any help or advice would greatly be appreciated.
You got yourselves a very good rate and good product from your existing lender. If it comes with readvanceable HELOC then this is the best you can get. Go with it. Good luck.
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Deal Addict
Apr 13, 2006
1080 posts
115 upvotes
Mississauga
If you already have the Homeline established, its probably at 80% LTV on the house. Rules have changed now, where you can only secure up to 65%. Might also be an issue, depending on how much equity you have.

Its a great rate where you're at.
[OP]
Member
Mar 11, 2004
393 posts
96 upvotes
Ottawa
kiz5 wrote: If you already have the Homeline established, its probably at 80% LTV on the house. Rules have changed now, where you can only secure up to 65%. Might also be an issue, depending on how much equity you have.

Its a great rate where you're at.
Wonderdollar wrote: You got yourselves a very good rate and good product from your existing lender. If it comes with readvanceable HELOC then this is the best you can get. Go with it. Good luck.
Thank You very much Wonderdollar & kiz5 for your input.

It is readvanceable HELOC as oer RBC Homeline Info.

I don't have the Homeline established as this will be a new product that I will be adding to my current RBC Mortgage. They mentioned 80% LTV on the house so they are honoring that part.

I had a co-worker mention to me to take 2.34 for 2yr fixed and check to see what happens in two years. I am not that confident or a risk taker for that matter.

Also, since I am going from a variable rate to a fixed rate will there be a new credit application? I know prior renewals was always sign the dotted line and thank you. I guess because I am renegotiating this is a must of having to pull my credit report.
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Jul 16, 2003
10398 posts
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Toronto
You can go as high as 80% for the total (combined) amounts between mortgage and Heloc. You cannot get a Heloc alone at 80% of the property value, only 65%, but combined with a mortgage you can get 80% total. For example, the mortgage could be 40% and the Heloc 40%, or mortgage at 65% and Heloc at 15%... as long as you do not exceed 65% in the Heloc portion, you are fine, as any amount over 65% of the property value has to be amortized.

And like others said, the rates you got are great.
Andre Oliveira - Mortgage Agent
Mortgage Intelligence - FSCO# 10428
[OP]
Member
Mar 11, 2004
393 posts
96 upvotes
Ottawa
laptop-tech wrote: You can go as high as 80% for the total (combined) amounts between mortgage and Heloc. You cannot get a Heloc alone at 80% of the property value, only 65%, but combined with a mortgage you can get 80% total. For example, the mortgage could be 40% and the Heloc 40%, or mortgage at 65% and Heloc at 15%... as long as you do not exceed 65% in the Heloc portion, you are fine, as any amount over 65% of the property value has to be amortized.

And like others said, the rates you got are great.
I am soo lost with this. Can you play with some numbers for me?

For instance: 200,000 Mortgage
Paid : $50,000
Balance : $150,000
House Value: $250,000.

I am going to speaking to my RBC this week and I want to understand this before I commit to their RBC Homeline and new Mortgage of Fixed rate @ 2.79.
Deal Addict
Nov 15, 2010
1873 posts
459 upvotes
deluxster wrote: I am soo lost with this. Can you play with some numbers for me?

For instance: 200,000 Mortgage
Paid : $50,000
Balance : $150,000
House Value: $250,000.

I am going to speaking to my RBC this week and I want to understand this before I commit to their RBC Homeline and new Mortgage of Fixed rate @ 2.79.
¸
If what laptop-tech says is true, you can get a HELOC for $50,000 (because 80% of $250,000 is $200,000 and your mortgage is $150,000).
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Jul 16, 2003
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Yes - in that case (using your numbers) you could get a Heloc of 50k and a mortgage of $150k. Those values combined amount to 200k, which is 80% of the property value. You can split the Heloc and mortgage in any way you want, as long as the Heloc portion (alone) does not exceed 65% of the property value. So, for example you could get :

A - 200k in total, with 100k in a mortgage and 100k in a Heloc
B - 200k in total, with 150k in a mortgage and 50k in a Heloc
C - 200k in total, with 162500 in a Heloc and 37500 in a mortgage
D - 200k in total, with 190k in a mortgage and 10k in a Heloc

What you cannot do is more than 65% ($162500.00 of the appraised value of 250k) in a Heloc alone, as anything over 65% has to be amortized. So if you wanted to get as much as possible as a Heloc and minimize the mortgage, you could get 80% of the property value (250K current property value, so 80% of that is 200k) but would have to keep a max of $162500 (65% of 250k) as a Heloc and $37500 (15% of 250k) would have to be amortized (any mortgage term).

Hope that clarifies it. Otherwise, feel free to ask.
Andre Oliveira - Mortgage Agent
Mortgage Intelligence - FSCO# 10428
Deal Fanatic
Mar 24, 2008
6005 posts
2274 upvotes
Toronto
deluxster wrote: I am soo lost with this. Can you play with some numbers for me?

For instance: 200,000 Mortgage
Paid : $50,000
Balance : $150,000
House Value: $250,000.

I am going to speaking to my RBC this week and I want to understand this before I commit to their RBC Homeline and new Mortgage of Fixed rate @ 2.79.
What's so confusing? Everyone is saying that it is a good rate and that readvance-able HELOC at prime + 0.5% is good. Your bank will tell you the exact amounts available to you before you sign the papers. :facepalm:
Deal Addict
Dec 5, 2003
1361 posts
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That sounds like the best you can find right now. Homeline is quite versatile. We are converting our 5 yr 2.99 fixed from last year to a Homeline plan.

They did a home appraisal on our place and it was a lot higher than what we thought it would be (60k above what I consider a fair FMV).

You can also have up to 6 products attached to the homeline plan. If you want 30k for investing and 20k for recreation you can split it to two HELOCs - as far as I know. You can also have a couple mortgages attached - 5 yr 2.79 and your 2 yr at 2.34%. Not sure how that works when one is up for renewal though.

The only thing we have been thinking of is that there is a collateral charge on the property. I am not sure how costly it is to discharge it if you switch or pay off your home. RBC's fee is $75 for the HELOC and I think there are legals which are 600-1100 but don't quote me on this. Any property with a HELOC will have a collateral charge.

Also, they usually cover fees related to the homeline when starting it up - otherwise I think there is a $250 charge or something.
[OP]
Member
Mar 11, 2004
393 posts
96 upvotes
Ottawa
laptop-tech wrote: Yes - in that case (using your numbers) you could get a Heloc of 50k and a mortgage of $150k. Those values combined amount to 200k, which is 80% of the property value. You can split the Heloc and mortgage in any way you want, as long as the Heloc portion (alone) does not exceed 65% of the property value. So, for example you could get :

A - 200k in total, with 100k in a mortgage and 100k in a Heloc
B - 200k in total, with 150k in a mortgage and 50k in a Heloc
C - 200k in total, with 162500 in a Heloc and 37500 in a mortgage
D - 200k in total, with 190k in a mortgage and 10k in a Heloc

What you cannot do is more than 65% ($162500.00 of the appraised value of 250k) in a Heloc alone, as anything over 65% has to be amortized. So if you wanted to get as much as possible as a Heloc and minimize the mortgage, you could get 80% of the property value (250K current property value, so 80% of that is 200k) but would have to keep a max of $162500 (65% of 250k) as a Heloc and $37500 (15% of 250k) would have to be amortized (any mortgage term).

Hope that clarifies it. Otherwise, feel free to ask.
Thank You. I have sent you a PM. My situation kind of changed today ... Essentlially, I am getting something different from RBC.

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