Real Estate

New Scotia specific Mortgage & HELOC rules with regards to re-registering

  • Last Updated:
  • Oct 23rd, 2019 8:29 pm
[OP]
Deal Addict
Feb 21, 2004
1456 posts
211 upvotes
Montreal

New Scotia specific Mortgage & HELOC rules with regards to re-registering

Hello,
Are there any Scotia customers here who recently increased their HELOC amount and are being told that you now must re-register it with a notary (lawyer for non-QC people) every single time?

We are being told repeatedly by our local branch that since August 1st, new rules came into effect where every time we want to increase the HELOC amount, despite having enough room, we HAVE to re-register the whole thing with the notary and incur all related fees.

Funny enough and long story short, we did end up doing the whole refinancing thing and going through the notary only to realize that Scotia ended up registering a HIGHER amount than we asked for again. We understand that all banks have done this for years so that their customers can increase the amount they can borrow throughout the years when the value of their houses went up ...without having to go back to lawyers and assessment. I'm asking because the bank's behaviour totally contradicts with what they are repeating ad nauseam to our face. Why register a higher amount when you still have to refinance every single time you ask for a HELOC increase?

I can tell you that this behaviour is NOT in effect at Desjardins. Grantred they are a coop and play somewhat with different rules....BUT they are still somewhat regulated by federal guidelines that apply to the Big 6.

For the curious, we regularly increase the HELOC after doing extra pre-payments on our mortgage to implement the fiscal cash damming strategy. This is going to make this impossible to implement in the next couple of years when we reach our HELOC cap again.
1 reply
Banned
Aug 23, 2019
897 posts
456 upvotes
HoTiCE_ wrote: Hello,
Are there any Scotia customers here who recently increased their HELOC amount and are being told that you now must re-register it with a notary (lawyer for non-QC people) every single time?

We are being told repeatedly by our local branch that since August 1st, new rules came into effect where every time we want to increase the HELOC amount, despite having enough room, we HAVE to re-register the whole thing with the notary and incur all related fees.

Funny enough and long story short, we did end up doing the whole refinancing thing and going through the notary only to realize that Scotia ended up registering a HIGHER amount than we asked for again. We understand that all banks have done this for years so that their customers can increase the amount they can borrow throughout the years when the value of their houses went up ...without having to go back to lawyers and assessment. I'm asking because the bank's behaviour totally contradicts with what they are repeating ad nauseam to our face. Why register a higher amount when you still have to refinance every single time you ask for a HELOC increase?

I can tell you that this behaviour is NOT in effect at Desjardins. Grantred they are a coop and play somewhat with different rules....BUT they are still somewhat regulated by federal guidelines that apply to the Big 6.

For the curious, we regularly increase the HELOC after doing extra pre-payments on our mortgage to implement the fiscal cash damming strategy. This is going to make this impossible to implement in the next couple of years when we reach our HELOC cap again.
yeah, I am well versed with the STEP program, except, I don't know the rules in Quebec. It could be that the rules did change. But if they did change, it would defeat the value add of the STEP program in Quebec all together..
can you talk to another branch/advisor?

When you say your branch, do you mean an FA at that branch? have you spoken to any other FA's, or escalated to the manager?

Also, Scotia has an internal credit rating system and a credit bureau rating system, where they rate you A-B-C-D. The scores between buruea and internal can differ, depending on your risk level to the bank.. some algo determines this.

A few years ago, they changed the STEP restructure process: if your internal score has fallen to a C rating, then every time you want to increase your HELOC to the STEP global limit, you need to do a full credit application. (at least in Ontario). Perhaps in Quebec, this means seeing a notary.. I don't know for sure.
There was talk that this would change back to the way it was in the past - where A-B-C customers could restructure STEPs without any issue. But Im not sure if it went through or not.

Lastly, I don't know if available any more, or in Quebec, but there is "auto limit increase" feature, which auto increases the LOC under the STEP as the mortgage gets paid down.

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