Personal Finance

Secured LoC from a different lender than the primary mortgage? Anyone done this?

  • Last Updated:
  • Jul 11th, 2020 11:18 am
[OP]
Deal Addict
Feb 27, 2008
1413 posts
569 upvotes

Secured LoC from a different lender than the primary mortgage? Anyone done this?

Hello,

I have a mortgage with a great rate from prime non-bank lender CMLS. CMLS doesn't offer Secure LoC services so I went to one of the big 5 banks who is willing to stand in second position collateral after CMLS to offer me a Secure LOC up to 65% of the home value.

Question is - What impact would this Secure LoC have on my:

1) Credit, should I wish to apply for another mortgage at the end of my term. Assuming value borrowed is $0 during application.

2) Current mortgage, should I wish to port it to a new home in a few years. How does that work if I have a LoC attached to it? I need to pay it off and close it first?

Reason I'm getting a Secured LOC is because all my equity is currently in my current home and I'd need about $70k as deposits within 6 months should I wish to buy a new construction build. The mortgage on those isn't stood up till closing and there's no other way to take $70k out of my current equity.

Thanks all,
6 replies
Member
User avatar
Jan 7, 2019
368 posts
373 upvotes
I don't believe any of the 5 big banks will provide a secured a LoC on your property since the mortgage is elsewhere. The big banks would be in second position to claim and they hate that.
Remember to always Thumbs Up good responses! Spread positively.
[OP]
Deal Addict
Feb 27, 2008
1413 posts
569 upvotes
Already got 2 banks telling me they'll do it because I have more equity in there than what I owe.. If I default, the first bank gets their money and the second will have plenty go recover from the sale price.
Member
User avatar
Jan 7, 2019
368 posts
373 upvotes
240sxer wrote: Already got 2 banks telling me they'll do it because I have more equity in there than what I owe.. If I default, the first bank gets their money and the second will have plenty go recover from the sale price.
Can you share which two banks said they would do it?
Remember to always Thumbs Up good responses! Spread positively.
Deal Addict
User avatar
Nov 18, 2007
3529 posts
635 upvotes
Corktown
Have you been given a quote for the rate that the bank is willing to offer? I would get that nailed down when/if signing.
Member
Apr 29, 2006
410 posts
175 upvotes
Brampton / Caledon
My mortgage is with RBC and I am currently in the process of getting a HELOC with Simplii. Simplii had the lowest fees ($150) and was willing to do a second in line HELOC.
Deal Addict
May 16, 2017
2364 posts
3086 upvotes
Saini wrote: My mortgage is with RBC and I am currently in the process of getting a HELOC with Simplii. Simplii had the lowest fees ($150) and was willing to do a second in line HELOC.
And RBC is ok with a secured HELOC against the property? Most mortgages have a "No Sell, Lease, or Encumber" clause that covers any and all parts of the mortgaged property.

Top