Comments on: Quick Tip: Get a Secured Line of Credit

By: Canadian Capitalist

Canadian Capitalist — Tue, 30 Nov 2010 18:28:07 +0000

@Joan: IIRC, you cannot use a RSP as a collateral for a loan.

By: Joan

Joan — Tue, 30 Nov 2010 18:24:40 +0000

…sorry, continuing: LOC is for $15k…thanks.

By: Joan

Joan — Tue, 30 Nov 2010 18:23:23 +0000

Can I switch my unsecured LOC to secured against about $300,000 in RSP in the same bank? (TD)

By: paul

paul — Mon, 27 Sep 2010 05:07:20 +0000

i have an apartment that has a 1st mortgage and a 2nd sloc. i now need to sell off the apartment for less than whats owed on the place. does anyone know if i can remove the sloc and make it unsecured or short the sloc

By: Chris

Chris — Tue, 17 Aug 2010 01:23:46 +0000

Claudia,

Secured line of credit against your income property is the way to go.
The interest on this is a write off.
Borrow as much as you need to do all the things you need to do (be realistic here)
Kill the CC debt first with the SLOC money
Buy the car .. second hand..never new , fix up the house

One payment to make now by doing this..use any extra money to pay off the SLOC fast.

By: Claudia

Claudia — Tue, 29 Jun 2010 13:37:03 +0000

Hello–I was just wondering if you would have any quick advice. My husband and I after 35 years still find dealing with finances a thorn in our side but we do our best – We have owned our house for 20 years (well, the bank I mean) – We had it paid off approx 15 years ago but we took out another small mortgage as my husband wanted to operate a greenhouse business so we took on another mortgage which we just paid down to $14,000.00 – In the meantime in 2005 we had a 700 litre accidental oil spill on our property, for which the oil company took responsiblity for their error and we have just rec’d a settlement from that five years later, just a month or so ago. Of course it wasn’t what we had hoped for in a settlement considering what we lost (alot of customers, my husbands ill heath etc) – - We had hoped to use a significant amt of this money to pay down debt, and do repairs on our home. Anyway….we are in need of a newer car, some repairs on our 80′s house (windows etc.) and we need to consolidate some credit cards. We are having an RBC banking representative come to our home today to discuss Line of Credit versus mortgage–the line of credit would be a variable rate, she says, so that is a risk I suppose as bank rates are supposed to go up in Canada soon – I’m just not sure – we are looking at setting up a mortgage fo $50,000. At the same time the thought of a mortgage again makes me ill – After the accidental oil spill I have become very leary of money etc.(and worries of the unforeseen) – I know that this is the reality…I am a Med Transcriptionist who makes a fairly good income and my hsuband is a school bus driver so our incoming funds are not that high–we have a rental property apartment bringing in $450.00 a month – That would bring the payment down. I guess you are wondering what I am asking – I’m just wondering is it a wiser decision to go with a Line of Credit, versus a mortgage?

Thank you for listening!
C

By: Tom

Tom — Sat, 19 Jun 2010 01:27:27 +0000

Thanks Jack, that was not something I had considered. I too, get a discount on my home insurance, no doubt they would take it away if I get a line o’ credit.

By: Jack

Jack — Sat, 19 Jun 2010 00:17:39 +0000

Apparently there is a 10% discount on our home insurance if there is no mortgage on the house. Had to get a letter from the bank that we were mortgage free for insurance discounts. Scotia was unable to issue a letter to us because these was a LOC on the house,

Wanted to cancel LOC through our mortgage (secured) this morning and was told it will cost $275?!! I was upset since we paid off our mortgage last year from Scotia bank to learn that there was still a LOC on the house.

Saving $90 year on insurance vs $275 fee to cancel the LOC?? I know there are good points to have a secured LOC, but is it worth saving on the home insurance??

By: Ian

Ian — Thu, 12 Nov 2009 05:02:05 +0000

I telephoned the BMO central number I got on the internet and they told me the rate was prime + 0.5%. I have been told that the legal costs are approx. $350 and there may be appraisal costs depending on the property value and the amount you want secured as a loan. In my case I won’t have an appraisal costs.

FYI
I’m probably going to use RBC which has the same rate because, from what I’ve read they may be less likely to increase the 0.5% at a later date.

good luck

By: Tom

Tom — Thu, 12 Nov 2009 02:49:09 +0000

Ian, where did you find BMO’s prime +0.5%? RBC is advertising the new lower rate, but I haven’t found any other competing ads. Even PC Financial is prime +1%. Does one need to negotiate the low rate with BMO or is there for anyone? And what should we expect in fees to set up a new SLOC (i think that PC Financial is $150) thanks, Tom