New mortgage rules for fully secured lines of credit mean they are no longer available up to 80%. (an exception to this are some credit unions) The new rules employ that if a borrower wants a full Line of credit on their property the amount is limited to 65% of property value. If a borrower however has a fixed or variable component to the mortgage (All In One product) minimum 15% of total mortgage then a line of credit can also be added up to 80% of property value.
Example is below
Client number one: Borrower’s home is valued at $500,000.00. Client wants full Line of credit only. Maximum amount will be 65% of property value or $325,000.00
Client number two: Borrower’s home is worth $500,000.00. Client wants a $200,000 fixed mortgage and remaining equity in Line of credit. In this scenario the borrower can go up to 80% of property value because a portion is in a fixed rate mortgage. $200,000.00 fixed mortgage and $200,000.00 Line of credit. For more information please contact me directly.