Yes I know I’ve been bad lately with blogging. Believe me I’m not
saying that mortgage news has been slow rather the opposite. Lots on the go and
there is talk of more Government
changes related to mortgages and HELOCs (aka home lines of credit). Presently,
if you wanted to buy or refinance your mortgage and home of credit can be
combined up to 80% LTV (loan to value). In other words, you can receive a
combination of mortgage and line of credit up to 80% of the market value of
your home. Hence the majority of that 80% on a home mortgage could heavily consist of a
home line of credit. In an effort to lower Canadian debt the Government is implementing new mortgage rules.
It appears we will still be able to attain the 80% LTV financing, through max 65%
heloc and 15% mortgage. Interest only payments and no amortization schedule
will remain.
Frankly, I’ve never been a fan of helocs. Taking on a home line of
credit needs to be calculated and the rationale needs to make sense (ideally
short term). Helocs in my opinion are too easily accessible and once loaded
they harm your credit score. It is unrealistic for most people to pay off a 100k
loaded heloc unless you refinance your home, sell or win the lotto. So yes, I partially
welcome new Government change. This change is supposed to take place later this
year and we await the final Government guideline.
If you have any mortgage questions let me know.
