Just went through this with my bank advisor. The upfront costs equalled the amount of interest payments saved in the first year. Not worth it for short term, credit card consolidation, but probably better used to build wealth long term.
@@Sean-mc4iq It's basically another form of mortgage, so you pay to have your home value assessed and you pay for the legal fees to set up the loan contract. Plus, I'm retired on a low income, and although I own my house outright I don't have the income anymore to qualify for a loan large enough to justify the setup costs.
If it's a pre-approval, then you can continue to look for other options. If you're talking about a signed commitment on a specific property, and you are scheduled to close, then I would highly advise against changing lenders, as it could jeopardize the deal. Are you working with a bank or a broker?
To clarify again, can u have 2 mortgages and a heloc in a step? Eg. i have a $100000 3 yr fixed rate mtg and $500000 home equity line of credit (heloc) limit on a house. Then i decide to use $400000 of my existing heloc to purchase another property (condo unit). Can i then fix the $400000 into a variable or another fixed rate mortgage within the step?
You can have a HELOC + mortgage(s) in a STEP program, as long as all criteria is met. If you have a 400k HELOC and borrow all 400k, you are borrowing at the HELOC rate. You cannot arbitrarily change it to another type of loan, unless you refinance it. To be clear, your mortgage components convert to the HELOC as you pay down the mortgage, not the other way around.
What If real estate crisis hits cutting the value of the house in half? Scenario 1: I have just started paying off the STEP. Scenario 2: I have paid off about 80% of the mortgage.
Need advice or a broker who's got your back? Contact me for all your mortgage needs: info@alternativemortgage.ca or 416-435-8340.
Thanks so much for this! So informative and clear.
Thanks for your kind words. If you need any help, don't hesitate to reach out to me. info@alternativemortgage.ca
Thank you for the Step Review
You're very welcome!
Just went through this with my bank advisor. The upfront costs equalled the amount of interest payments saved in the first year. Not worth it for short term, credit card consolidation, but probably better used to build wealth long term.
What upfront costs did you run into? Not really any upfront costs.
@@Sean-mc4iq It's basically another form of mortgage, so you pay to have your home value assessed and you pay for the legal fees to set up the loan contract. Plus, I'm retired on a low income, and although I own my house outright I don't have the income anymore to qualify for a loan large enough to justify the setup costs.
Thank you well done video. This is a perfect product for the Smith maneuver.
How do I know what my heloc rate is? It’s not listed in the app.
I was pre-approved by one of the big Bank but before the closing date can I go with a different Bank if they offer better?
If it's a pre-approval, then you can continue to look for other options. If you're talking about a signed commitment on a specific property, and you are scheduled to close, then I would highly advise against changing lenders, as it could jeopardize the deal. Are you working with a bank or a broker?
@@victorcamba thank you for your quick response. I am working with the bank.
l have sent all criteria but have been stalled according to advisor due to new requirements of which l have met
To clarify again, can u have 2 mortgages and a heloc in a step? Eg. i have a $100000 3 yr fixed rate mtg and $500000 home equity line of credit (heloc) limit on a house. Then i decide to use $400000 of my existing heloc to purchase another property (condo unit). Can i then fix the $400000 into a variable or another fixed rate mortgage within the step?
You can have a HELOC + mortgage(s) in a STEP program, as long as all criteria is met. If you have a 400k HELOC and borrow all 400k, you are borrowing at the HELOC rate. You cannot arbitrarily change it to another type of loan, unless you refinance it. To be clear, your mortgage components convert to the HELOC as you pay down the mortgage, not the other way around.
Yes. You can.
What If real estate crisis hits cutting the value of the house in half? Scenario 1: I have just started paying off the STEP. Scenario 2: I have paid off about 80% of the mortgage.
No issues unless they run a new appraisal. If you renew with them they won’t do that.
The Title of this video should be... "The Bank of Screwy Notions Equity Grab" !!!
Agreed！！