Advanced Mortgage Strategies in Vancouver, BC

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For those looking beyond the more standard mortgage options, we can help you find the right advanced strategy for your home.

Home Equity Line of Credit

A home equity line of credit (Heloc – pronounced Hee Lock) gives you access to the equity in your home at your own discretion. You are responsible for interest only payments each month on the outstanding balance that you use.

In many cases, Helocs are used for investments purposes but a Heloc can also be used for consolidating debt, renovating a home or for access to large amounts of pre-approved emergency funds. Actually, you can do whatever you want with a Heloc – it’s one large revolving line of credit…

One word of caution: it’s very easy to over borrow using your Heloc. Sound investment and borrowing decisions should be made prior to taking money out of your Heloc with planned repayment being a top priorities.

Some notes on Helocs:

  • Not every lender has a HELOC product available
  • Interest is variable and tied to the bank’s prime interest rate
  • Since 2012, a Heloc’s maximum value cannot exceed 65% of the value of your home.
  • Helocs are registered on a home as a collateral mortgage (explained in the Readvanceable Mortgage section)
  • Can be included with a Readvanceable Mortgage

Readvanceable Mortgages

A readvanceable mortgage lets you reborrow the principal amount paid off each month to a maximum of 80% of the value of your home.

The readvanceable mortgage is a combination of one or more mortgages (segments) and home equity lines of credit (HELOC). Mortgage segments within a readvanceable mortgage are treated as a standalone mortgage, each can have different terms, amortizations and rates. Readvanceable mortgages always have at least one HELOC segment.

Tax Deductible Mortgage Strategies

In Canada, interest on money borrowed for investments can be tax-deductible. That is why so many people get HELOCs and use them for investments.

Generally a personal home is not considered an investment for tax purposes. However, by using a readvanceable mortgage, it is possible to make your residence’s mortgage interest tax-deductible while paying off your mortgage faster. Making your mortgage tax-deductible is not without its risks so please do consult your mortgage expert (me) :).