Posted on: 12-03-04 14:19:02
Hello
I bought a condo last year, with a downpayment of around 15K.My total mortgage outstanding as of now is around 119K and my current property value is around 145K.
I am in urgent requirement for some funds. I have been told by a friend that I could refinance my mortgage based on my current eligibility criteria or get a line of credit against the property(secured).
Which one is better? I am confused and I dont want to draw myself to a debt trap. I wont be able to repay this money in full for atleast two years. I took a three years mortgage and only one year is passed.
Any form of advice would be greately appreciated.
Thanks a lot for assistance..
Timon
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Quote:
Orginally posted by Timon
Hello
I bought a condo last year, with a downpayment of around 15K.My total mortgage outstanding as of now is around 119K and my current property value is around 145K.
I am in urgent requirement for some funds. I have been told by a friend that I could refinance my mortgage based on my current eligibility criteria or get a line of credit against the property(secured).
Which one is better? I am confused and I dont want to draw myself to a debt trap. I wont be able to repay this money in full for atleast two years. I took a three years mortgage and only one year is passed.
Any form of advice would be greately appreciated.
Thanks a lot for assistance..
Timon
Hi Timon,
Since you put only 15 K down payment, I am presuming that you paid CMHC premium (or GEMICO premium) at the time of buying. The properties, which are insured by CMHC can get upto 90 % of the appraised value of the house and this appraisal is done by CMHC itself. Considering the present value to be $145 K, you can get upto $130 K less CMHC charges (which could be $165 application fee and upto $500 in top up premium plus lawyers cost app. $450 or so) which means you will end up getting app. $ 9k to $10 K in your hand. The bank will make total one payment based on the total amount of loan but you have think whether paying this cost of app. $1,000 for getting funds of only $1,000 K is in your interest or not.
Similarly, if you try line of credit (secured) on the same proprty, there would be similar costs and you will have to pay a minimum of 3% per month by way monthly payments.
The best way could be to approach your bank and try to get 'personal line of credit' on which you might pay a little extra rate of interest but would save the above mentioned costs.
Or, Alternatively, give me a call at 416-560-6951 and after getting more information from you, I will suggest to you the best possible solution as per your situation.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Timon,
You can also send me a personal email with your details and I will advise you accordingly.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
