Home Equity Line of Credit

Matthew Jackson Mortgage Tips

Hey Everyone,

This column I am going to go over the qualifications and process you would normally go through to get a Home Equity Line Of Credit.

The first step is you either need to have 20% equity in your home already or have 20% down payment minimum when you are purchasing.
This allows you to enter into a conventional mortgage where you do not pay CMHC fees.

If you have 20% equity or have 20% down payment then up to 65% of your mortgage can become a line of credit and the other 15% or whatever percentage is left over if you did less then a 65% HELOC can be a fixed or variable rate mortgage.

So lets say you are buying and have 20% down on a $400,000 purchase. So your total mortgage would be $320,000. $260,000 of this could be a line of credit and the other $60,000 can be fixed or variable. You may have more be fixed / variable if you so choose.

Home Equity Lines of Credit or HELOC’s are currently Prime (2.7%) + 0.5% = 3.2%. If prime goes up then so does your rate. They are also interest only payments, so you can choose to pay a very small amount or you can choose to pay everything off at once with no penalty.

Since it is a line of credit, you may pay it down and re-advance whenever you choose and there are no penalties for paying it down as much as you want.

If you have any other questions on this contact us anytime!

Regards,

Get Approved Today!

Matthew Jackson
www.mortgageokanagan.com