Originally Posted by puckedoff
Is there any benefit to trying to get a HELOC at the same time as you go through your mortgage renewal? Could it be used to "sweeten the pot" by the borrower in order to secure a better rate from the lender?
In my case I forecast to have some equity built up at my next mortgage renewal, but not enough equity such that the LTV with the HELOC would be below 65% or the threshold to have a HELOC with an institution that does not hold the mortgage.
Given that I would have to arrange the HELOC with the bank that wins my mortgage renewal, is there a benefit to me in using this in the negotiation?
Thank you for the question. Unfortunately, the lender is unlikely to sweeten the pot if you request to obtain a HELOC. The rate that is offered will be standard with or without the HELOC.
In many cases, the rates offered by institutions without a HELOC product, tend to have better rates. Mainly non banks that do not offer HELOC tend to have lower rate options.
Note that you can still obtain a HELOC even if you mortgage balance is above 65% LTV. The maximum HELOC you can obtain is up to 65% LTV but you can obtain a combination Mortgage & HELOC up to 80%.
Meaning that if you mortgage is at say 70% LTV now, you can obtain a HELOC for the remaining 10%. With that said, as you pay down the mortgage, the HELOC will grow, this feature is called a re-advanceable product.
If you are interested in speaking more about the product choices or pros and cons of a HELOC, please do not hesitate to PM, email or call.
Thank you for the question... have a great evening.