QUOTE (KenReynolds @ Feb 8 2008, 10:59 AM) I have been using Manulife One but I may be moving to Scotia Bank.Manulife
Pros:
- no income verification
- interest at prime
- no cost to set it up (neither legal nor appraisal of house)
Cons:
- if you use the "no income verification" component, they only go to 65% LTV (I don`t know what the limit is if you can show income)
- $14 service charge every month (more of a nuisance than anything else)
- if it is in 2nd place behind a 1st mortgage, they require you to port your 1st over to them at the end of the term (5 yr, etc.). If you don`t, the interest rate on the LOC goes up 1%
- virtual bank (although you deposit through RBC and one other, there can be issues - e.g. if you want a bank draft, it takes a couple of days to get as they have to courier it)
Scotia (as far as I understand it - best check with a mortgage broker like CMT)
Pros:
- "statement income" program - no verification required
- interest at prime
- goes to 75% LTV
- no monthly service charge
- a real bank with real people that you can form relationships with
- no appraisal fee to set it up
Cons:
- you pay legal fees to your lawyer
I haven`t asked if Scotia requires the 1st to be with them or not.
If its a product that you are setting up on your principal residence - you`ll want to make sure that it is a true readvancable mortgage. If its just a large LOC which you can get through pretty much any bank - its always readvanceable. If its a combination mortgage and LOC - its not always the case.
If you take a product like the STEP or the matrix, the mortgage and LOC are one financial charge - as the mortgage gets paid down, it becomes availiable on the LOC.
If its a first mortgage and an LOC second, the amount that you pay down on your principal mortgage - does NOT become availiable on the LOC - NOT the right product if you are planning on using the smith manouvre. If that is what you are planning on doing - make sure that your mortgage broker or banker is familiar with revenue property financing and the smith manoeuvre or you might wind up with the wrong product.
Hope that helps,