How to pay at the closing

[reinvtoronto]

Hi Real Estate newbie here.

I purchased $400,000 condo.
I`ve paid $100,000 which is 25% of purchase price.

I am thinking of using my HELOC from my current home and have a mortgage for the rest.
My primary house is paid off.

I would like to hear your thoughts.
Is mine what usually what they do or is there any better way?

 

[bizaro86]

QUOTE (reinvtoronto @ Aug 23 2010, 12:47 PM) Hi Real Estate newbie here.

I purchased $400,000 condo.
I`ve paid $100,000 which is 25% of purchase price.

I am thinking of using my HELOC from my current home and have a mortgage for the rest.
My primary house is paid off.

I would like to hear your thoughts.
Is mine what usually what they do or is there any better way?

It depends on your future goals. I would try to get a mortgage on the condo for the remaining 75% of the purchase price. That way you can save the equity in your home/heloc for a potential future deal.

Regards,

Michael

 

[GaryMcGowan]

Talk to a mortgage broker that will listen and understand what your long term goals are. `
What are your plans with the condo?

 

[Thomas Beyer]

why not a new HELOC for condo too .. far more flexible .. pay as much or as little as you want .. at prime !!



related reads:



LOC vs. mortgage: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-2302-What_is_better_a_mortgage_or_a_line-of-credit_.html



Are you too levered ?

http://myreinspace.com/public_forums1/Real_Estate_Discussion/62-10823-When_are_you_too_levered_.html

 

[reinvtoronto]

Thank you everyone for your inputs.

My plan for a new condo is for the long time growth so for now I would like to rent it out to gain equity.
The thing is I don`t make enough money to be qualified for full mortgage for this condo so get a mortgage as much as I can borrow then rest as HELOC.

 

[GaryMcGowan]

Is it a new build, or a resale? Has the condo complex been registered?
Talk to a mortgage broker see what kind of financing they can get you. I wouldn`t recommend talking to your local bank as brokers have more options and are generally better at finding the right product for you. If you are in Toronto I can recommend a couple. My email is below.

 

[kboughen]

With a mid to long term hold, I would suggest registering a mortgage on the rental property as it will free up room on your HELOC which is then available as a reserve fund and possibility for additional investments. When deciding how large the new mortgage should be, and how much should stay on the principle residence HELOC, you need to consider both the rental properties Debt Coverage Ratio, (DCR), with the new mortgage included, as well as your personal Total Debt Service Ratio (TDS), with the HELOC carrying cost included.

A good Investor Mortgage Broker that understands your goals, will be able to evaluate the options and recommend a good balance between the mortgage and HELOC; they will also have access to Lenders that offer Investor friendly Terms, Products and qualification guidelines.

 

[reinvtoronto]

QUOTE (kboughen @ Aug 25 2010, 06:45 AM) With a mid to long term hold, I would suggest registering a mortgage on the rental property as it will free up room on your HELOC which is then available as a reserve fund and possibility for additional investments. When deciding how large the new mortgage should be, and how much should stay on the principle residence HELOC, you need to consider both the rental properties Debt Coverage Ratio, (DCR), with the new mortgage included, as well as your personal Total Debt Service Ratio (TDS), with the HELOC carrying cost included.

A good Investor Mortgage Broker that understands your goals, will be able to evaluate the options and recommend a good balance between the mortgage and HELOC; they will also have access to Lenders that offer Investor friendly Terms, Products and qualification guidelines.

Thank you Kevin

I guess I have to crunch numbers DCR and so forth but after all other inputs I think I would go for mortgage as much as I can afford then use HELOC for the rest.
Do you know any mortgage broker you could recommend? I am living downtown Toronto.

Thanks!!

 

[kboughen]

_________________________________________________________________________
QUOTE

Do you know any mortgage broker you could recommend? I am living downtown Toronto.

Thanks!!
QUOTE
__________________________________________________________________________


I would be pleased to book a meeting with you, my office is at;

Dominion Lending Centres
25 Sheppard Ave West
Suite 300, Toronto, On
M2N 6S6

I also have meeting space at the following two downtown locations;

1200 Bay Street
Toronto, On

330 Bay Street
Toronto, On

Feel free to contact me at the numbers or email address below.

 

[GaryMcGowan]

Talk with Kevin, as he comes highly recommended!