Using RRSP Or HELOC for Downpayment for investment property

[Matt Crowley]

I'll assume the data provided above is correct...David's interpretation looks correct to me.



There are still options



- you can shop around for a better mortgage rate on your existing mortgage. If your mortgage is open you may be able to do this...but there may be penalties for this! (check your mortgage agreement). If your mortgage is currently at a higher interest rate or in the middle of its amortization, you may be able to extend the amortization period and thereby lower the payments

- $200k is a little lower than your initial target of $300k for a half-duplex...you could consider townhomes or condos

- on the plus side, if you go townhome you may not need to touch much of the HELOC money if you can stay in the $240k range (Calgary investors may be laughing but you can still find them in Edmonton...even in the $170s)

- do you know a co-signer? Friend, parent, sibling? This can increase your capability to borrow.

- do a JV with someone else you know to buy the asset class you want (this also opens up that $70k in RRSP as eligible for real estate investment). You have income qualification + desire to work and learn in real estate + up to $250k in possible investment funds...you are one hell of a good potential investment partner!



[quote user=vnwind]
Oh well, i will try different broker and see but does it hurt my credit score as i have already 3 mortgage broker pull my credits history within 2 months so far on my equifax report ?




Yes, it is starting to look like debt shopping I imagine. I would likely be cautious going forward. It's pretty common for a broker to insist that he needs to pull your credit to submit a mortgage application...this covers his butt. If you have a relationship with any bankers you can just bring in your credit report and ask that they don't pull your credit. I have a relationship with my banker at Servus and she is willing to do this for me. You are exposing them to more risk and it would be really helpful if you had a relationship with someone before asking for something special like that.

 

[vnwind]

Thanks Matt

well, I transfer money from my HELOC to my saving just in case I can't find any mortgage deal and have to stick with my original deal. 100 dollars for interest per month is not bad, i can live with that. I got a referral from another friend and this time I am qualify for 430K and don't need to transfer my HELOC for 90 days (just a week or two before closing) and the interest rate is 3.19 which I think is great.



I also noticed my credit rating has dropped 9 points from 788 to 799 due to all credit checking lately. I am sure of this because I have not obtained any new loan or have any late payment. So just want everyone to be careful when you get too many credit checks, your rating will drop



Cheers, now I am back to house hunting.

 

[Matt Crowley]

Nice work!



The numbers weren't adding up for me either...I'm glad to hear you got the mortgage you wanted though!

 

[REQRentals]

Hi vnwind,



In reading this my only question is did the brokers you were referred to have a solution for the GDS/TDS issues that was raised by the broker that Sweetzone referred ?



I just ask because loan brokers have no incentive to raise these issues if you don't.



It is in their interest to collecting all your information and then raise these issues as the process goes along.



By getting your information even if the deal is obviously going to fail they are then in a better position to sell you whatever product you actually qualify for.