heloc


LeahCoss.ca Hi everyone. How are you? It’s Leah Cross with The Mortgage Center. There’s hammering in the background, so just ignore that. I wanted to go over home equity lines of credit or HELOCs as they’re otherwise known. Now, what is a home equity line of credit? It is a secured line of credit that is put against your home. Now, it basically works the same way that a regular line of credit does except that you’re probably getting a better rate simply because it’s secured against the actual house. So it has value to the bank as opposed to a regular line of credit that they’re just kind of giving you on good faith. The rates only fluctuate in terms of the variable always, but it fluctuates from variable plus a percentage to variable minus percentage. It just depends on economical factors much like everything does these days. So, how do you get a home equity line of credit? It sounds like a great thing. Well, if you’ve ever bought a house with less than 20% down, then you’ve probably had to pay CMHC or Genworth mortgage insurance fees. When you’re putting less than 20% down on a home, you’re basically subject to CMHC and Genworth’s rules. CMHC and Genworth do not like the idea of a home equity line of credit. They say if you have less than 20% in there, you should not be able to use that like a bank account. They don’t like the idea of it. However, once you’ve put more than 20% in the home, you’re now not subjected to CMHC and Genworth rules. You’re subjected simply to …