Opinions on re-financing using Manulife One product?

[DebMT]

Hi everyone!



I'm wondering if anyone has experience with, or opinions about, the Manulife One product which basically makes 80% of your house value into one big home equity line of credit. Every payment turns into equity that can be re-borrowed again and again. I was thinking the equity from the house could be used to purchase investment properties.



Any help and advice is really appreciated!



~ Deborah

 

[Thomas Beyer]

It's a great product for the undisciplined. i.e. it is a convenience feature that comes at a cost !



Their interest rate is prime PLUS 1 .. and with most banks you can get a LOC at prime .. and a mortgage at prime MINUS 0.5% or so .. or a fixed rate at 3.6% .. so you must be able to make up this 1% (or 33%) in add'l cost through the cash you hold uninvested.



Great for folks that occasionally forget to pay off their credit card (and thus incur a high interest charge), have a lot of cash hanging around and a fairly low mortgage balance.

 

[RobMacdonald]

It is a great product and is similar to products offered by a few other lenders.



I strongly advise clients to have products like this on their principal residence and rental properties if possible. It allows you to take control of your borrowing and avoid future costs for equity take outs.



Not all products like this are created equal, so compare the pro's and con's of each before considering. I think you can do better in the marketplace with respect to the interest rates Manual One offers, and still get the same great features.



Contact me directly if you would like further details. I realize you are in Ontario, but there are no boundaries when it comes to working with a mortgage broker.

 

[MrHamilton]

[quote user=DebMT]experience with, or opinions about, the Manulife One product


Hi Deborah,



We have ManulifeONE on our principle residence and the current rate is prime plus 0.5%. Before the credit crunch it was prime, after it went to plus 1%.



The biggest selling feature when we chose this product was the unlimited sub-accounts you could create to track our downpayments on our investment properties when at the time Scotia would only allow max four.



The biggest con is having to use their smaller network of ATM's so I'm often having to get cash back when buying groceries.



Finally, at this time, Manulife will only go 60% LTV on an investment property.



Hope that helps!

Erwin

 

[DebMT]

Thanks very much for the helpful advice and experience!