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New Rules for Second Mortgages in Canada
The mortgage world is abuzz with new information regarding getting additional financing for those who have a HELOC. Some of the Big Six banks have adopted the policy as of recent update. This means that those who have a HELOC will now have to prove that they are capable of paying the theoretical monthly payment based on their HELOC limit and not just the minimum required based on what they actually use.
Impact of HELOC ChangesThe largest provider of HELOCs in Canada, TD Canada Trust, have also adopted the new changes, joining some other major banks including RBC. Rob McLister of RateSpy.com says that with these changes, the banks will assume that you’ve used up all your credit despite having zero balance. This change will have a significant effect on those who may want to get additional financing if they already have a HELOC.
McLister adds that this new development means that someone with a HELOC limit of $200,000 will now have to prove that he or she can afford to pay a $1,202 HELOC payment on a monthly basis. This translates to a sizable number of Canada’s 3.1 million HELOC holders now deemed unqualified to get additional financing like some can still ... more

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