Lines of Credit

How do you put a line of credit on your home? Can you have a line of credit and another mortgage on it already?

These are questions we are asked all the time. A line of credit can be placed on any property as long as you leave 20% of the equity in the property. (Equity is the difference between the VALUE of your home and the amount left OWING on your mortgage).

You can have a line of credit instead of a mortage and in addition to another mortgage. The benefits of a line of credit are:

1. If you owe very little on your property it is generally cheaper to have a line of credit as you only make interest payments. This is particularly good for people who wish to renovate as an example.
2. Many people put on a line of credit to buy another property. As an example, many of our clients are buying investment property in the Dominican Republic and either refinance or put a line of credit on their Canadian home to pay for it.
3. A line of credit requires discipline on the part of the borrow. It's easy to let it get out of control and never pay off the principle.

Talk to us about how a line of credit works and if it would work for you. We can tell you the benefits as well as the drawbacks.