30 and 35 year mortgages

[DementedReality]

[quote=I-Hate-Hulse

Demented Reality - It's quite simple really. Borrow money cheap and make sure you get a return that's higher than the rate of interest you pay.[/quote]

well that makes sense .. if you know what to do with it. i guess i would rather not owe anything and not worry about it.

any good resources though that i can read through? i love reading about money management and strategies.

[Bertuzzied]

Originally Posted by albertGQ

I heard from a very reliable source that ATB Financial is offering HELOC's at a rate of prime - 0.51% during their spring campaign

Some of you guys may want to check it out.

Holy that is huge. Do you have to negotiate to get it? i dont' see anything on their website. If i get this approved I'll give you and CP $100 each.

[Bertuzzied]

Originally Posted by photon

Nice! My HELoC is at prime - 0.5%, and I was sure my bank was totally mistaken when they offered it because no one else I have talked to could get one or had heard of one.

Which bank?

Never mind. I guess the prime -.5% is only for the first 6 months and then it goes back to prime. CIBC even had one for -1% but once again only the 1st 6 months.

[albertGQ]

Originally Posted by Kobatuzzied

Holy that is huge. Do you have to negotiate to get it? i dont' see anything on their website. If i get this approved I'll give you and CP $100 each.

No, its a promotion. You still have to qualify for it though. And I should mention the prime minus 0.51% is for the first year. After that, it goes to prime

[Draug]

Originally Posted by albertGQ

I heard from a very reliable source that ATB Financial is offering HELOC's at a rate of prime - 0.51% during their spring campaign

Some of you guys may want to check it out.

When does that spring campaign start?

[Bertuzzied]

Originally Posted by albertGQ

No, its a promotion. You still have to qualify for it though. And I should mention the prime minus 0.51% is for the first year. After that, it goes to prime

Hmmm that only saves me $1300 but i'm sure they will charge $300 appraisal to switch it.

[albertGQ]

Originally Posted by I-Hate-Hulse

Nope, you can break your term mortgage with your existing mortgager and jump to a new one......at a penalty.

You don't have to break your mtg. You can keep your mtg at your current bank and if you have sufficient equity, you can also get a HELOC.

Eg. Your home can get appraised for $250,000
You have a $100,000 mortgage with CIBC (random bank)
$250,000*0.75=$187,500
$187,500-$100,000=$87,500

Therefore you can keep your current mortgage and apply for a HELOC with ATB Financial (random bank) for $87,500 as well. CIBC has $100,000 of your home as their collateral and ATB has $87,500

[albertGQ]

Originally Posted by Draug

When does that spring campaign start?

Its already started

[albertGQ]

Originally Posted by Kobatuzzied

Hmmm that only saves me $1300 but i'm sure they will charge $300 appraisal to switch it.

If your home is 40 years or newer, you can save money by using your property tax assessment instead of paying for an appraisal. ATB Financial will still take 75% of that figure. This will save you a couple hundred dollars, but the amount you can get for your HELOC will be lower since a property tax assessment is always lower then what it can get appraised at.

So you have to weigh the cost of how much you need/want your HELOC for versus the couple hundred dollars you can save by using your property tax assessment. Of course, there will be legal fees whether you use an appraisal or your tax assessment

[Bertuzzied]

Originally Posted by albertGQ

If your home is 40 years or newer, you can save money by using your property tax assessment instead of paying for an appraisal. ATB Financial will still take 75% of that figure. This will save you a couple hundred dollars, but the amount you can get for your HELOC will be lower since a property tax assessment is always lower then what it can get appraised at.

So you have to weigh the cost of how much you need/want your HELOC for versus the couple hundred dollars you can save by using your property tax assessment. Of course, there will be legal fees whether you use an appraisal or your tax assessment

Well I know TD uses inhouse lawyers so there were no legal fees but they charged me an appraisal fee. I switched to Scotia earlier this year who waived the appraisal fee but charged me the legal fees.

I just want a Heloc that is prime -.5% You work in a bank don't your Albert? Set me up! hehe

[albertGQ]

Originally Posted by Kobatuzzied

Well I know TD uses inhouse lawyers so there were no legal fees but they charged me an appraisal fee. I switched to Scotia earlier this year who waived the appraisal fee but charged me the legal fees.

I just want a Heloc that is prime -.5% You work in a bank don't your Albert? Set me up! hehe

You can call ATB Financial at 1-888-404-4646. M-F 8:30am to 7:00pm and Saturday from 8am-5pm. Anyone that answers the line can assist you right over the phone. That is the number to the loans and investments department. They'll ask some probing questions and may proceed with an application depending on certian things (eg. credit history, debt to income ratio, etc). You will eventually need to come into a branch when/if you're approved, but all the initial stuff can be done right over the phone. Ask about the HELOC promotion specifically. They may not give it to you if you don't mention it. So, MENTION IT!

PS: DON'T ask for me. I just got back from California and I'm behind on alot of things. There's nothing extra I could do for you anyway. You still have to be within ATB's policies and guidelines. I have no authority to override anything. My hands are tied. Sorry bro.

[V]

Thanks for the info, albert. I'll have to give ATB a call. That interest rate beats the hell outta my 7% LOC.

[photon]

Originally Posted by Kobatuzzied

Which bank?

Never mind. I guess the prime -.5% is only for the first 6 months and then it goes back to prime. CIBC even had one for -1% but once again only the 1st 6 months.

Bank of Montreal. And mine doesn't switch, it's prime - 0.5% for as long as I have it.

At the time my mortgage broker was choked because she couldn't match it, so I had to take my business to BMO.

I'm 90% sure it's a total mistake by the manager at BMO, but he had to honour it once he offered it. I'm not ever letting this go.

[photon]

Originally Posted by DementedReality

i am wondering, honestly, why you would want to have debt?

for instance, if i owe no money, other than my mortgage, what does having a good rate HELOC do for me?

is it better to borrow than spend your own cash? maybe i dont get it, but at least I dont have any debt! although, i would like to hear from some of our financial people the value of cheap equity secured debt.

Ask anyone who's wealthy how much debt they have. They'll always tell you they are borrowing TONS of money.

The difference is they don't "spend" their borrowed money, they invest it.

Having debt is a good thing, it's having debt to pay for things that don't have any value and don't appreciate in value that's a bad thing.

I'll never make $1 million by saving my money no matter how good a job I get. But if I take my money and borrow more and buy things that appreciate, I'm using other people's money to grow my own.

Some people like paper investments (stocks, etc), some people like business ownership, and some people like real estate.

I would suggest getting a good financial planner to see what your options are.

[Rhettzky]

Originally Posted by photon

Bank of Montreal. And mine doesn't switch, it's prime - 0.5% for as long as I have it.

At the time my mortgage broker was choked because she couldn't match it, so I had to take my business to BMO.

I'm 90% sure it's a total mistake by the manager at BMO, but he had to honour it once he offered it. I'm not ever letting this go.

You might change your tune when interest rates climb. I think you guys have to seriously consider locking in at an interest rate now and staying away from these deals. It's obvious that interest rates are starting to climb and I've heard from some sources that they could be as high as 8% within a year. We locked our house down at 4.7% last year and this year it's already looking at around 5.3 - 5.7% (we're considering moving again).

[Sample00]

hey guys
good morning, just caught the thread...and am gonna wade in with a couple of thoughts.

I, personally, dont have a problem carrying a mortgage either, as long as its good debt (ie: investment kind)..drives my wife crazy, but I dont care if I ever pay the house off, if I am using cheap money to invest in other property, stocks..etc.

HLOC are a great tool. If you are using your house as security for a HLOC, PLC etc...banks should be giving you at the very minimum prime + 1. Prime + .5 should be the norm. IF you arent getting this..shop around!

Interest only mortgages can be a good thing if you are looking at flipping the property or using the money for investment purposes. For a strictly homeownership point of view..I would say no, cause you wont ever get anywhere with it then.

I live out in the sticks and havent heard the 30-35 year mortgages by CMHC. Banks wont typically do those kinds of mortgages in rural alberta which is probably why I havent caught wind of it yet. Is it a good idea?
Well, it only reduces your payment slightly and well if that helps you get into a home, why not. when I bought my first condo in calgary many years ago, a company called sunlife offered a 50 year mortgage, I took it!
kept the payment nice and low.

As far as ATB is concerned, and no offence to anyone that works for ATB, but, its a government financial institution that plays by its own set of rules. Its our tax dollars hard at work. ATB's rules are different than any other financial institution (ie) charters or CU's when it comes to lending and/or investments. they sometimes offer lower rates on products when it comes to lending and sometimes they offer higher rate of returns when it comes to guaranteed investment products. Why?..because they dont have any shareholders to answer to, just the government.

anyhow, if you have specific questions with regards to mortgages, please feel free to give me a buzz, I would be more than happy to answer them.

[Sample00]

Originally Posted by I-Hate-Hulse

There are a fair number of interest only mortgages out there right now too.

Contact a mortgage broker *coughsample00* for info on who's offering what right now.

thanks cough for the cough mention..cough..*slides ya a 20*

[V]

Originally Posted by DementedReality

i am wondering, honestly, why you would want to have debt?

Think of it this way. I have my personal finances, which have never changed from day one. I try to pay off my mortgage, student loans, and monthly bills.

Now I have access almost free money that the banks want to give me. If I keep that money completely separate from my personal finances, and use it to make me more money than I borrowed, I will be able to pay back the loan, and pocket the change for myself. If I only did this once, I could take that bit of money that I made and put it up against my mortgage, and probably pay that mortgage off 6 months or so quicker. My mortgage is smaller, the debt I accrued to make the money is gone, and I'm just a little further ahead in life. All without touching my personal finances.

Of course, I could lose on my investment, and then my personal finances would probably be affected, but that's all part of the risk/reward matrix. Find what you're comfortable with and go with it.

At 80K per year, it's going to take a long time for me to pay off that mortgage and start living the debt-free life. I don't think I like my job enough to wait that long.

I should tell you about my buddy at work here. Probably a pretty rare case, but he used the REIN network and purchased 18 properties within 2 years about 4 years ago. He's had a small positive cash flow from each property, so he makes a little bit there. Just imagine how much house prices have gone up in the last 4 years. Take the low end of the spectrum and assume each house has gone up 150K since he bought them. As soon as he sells his properties, he'll have to pay back the loans he used to purchase the houses plus interest, and walk away with at least 125K from each house. With 18 properties that works out to a total of 2.25 million. Sure, he has to pay taxes on that, and I'll be interested just how he does everything to avoid as much tax as possible, but the guy just made over 2 mil gross without a single dime of his own personal finances! He might have been in debt up to his eyeballs for a while, but the reward sure payed off there.

To tell you the truth, I'm not sure why the guy still works here. I'd sell off at least half the properties right now, retire, and use my new-found time to manage the remaining properties and live off the interest. Of course, since he's made all this money he's developed more expensive tastes, and I think that's what's keeping him here.

[V]

Originally Posted by Sample00

thanks cough for the cough mention..cough..*slides ya a 20*

So Sample, this question is probably better suited for pm, but would a lending company be willing to offer a short term interest only mortgage for a second property?

[Bertuzzied]

Originally Posted by Dominicwasalreadytaken

Thanks for the info, albert. I'll have to give ATB a call. That interest rate beats the hell outta my 7% LOC.

Hmmm i think if you are paying 7% on your LOC it's probably not a secure line of credit.

Interest rates just want up another .25% today. Prime is at 5.75 now.