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Can You Get a Second Mortgage if You Have a HELOC?
An increasing number of homeowners currently has a HELOC so the question is, is it still possible to get a second mortgage if you already have an existing HELOC? The fact is, that may be a big challenge considering the recent changes for second mortgages implemented by Canada’s leading HELOC provider, Toronto-Dominion Bank. Whereas homeowners only needed to prove that they have considerable home equity before, now they have to prove that they will have no trouble paying another second mortgage on top of having a HELOC. More so, banks like the Royal Bank of Canada now require that homeowners meet a theoretical monthly limit and not just prove that they have a stable income source.
According to industry experts, the change above will have a huge impact on both second home and rental markets as well as everyone who wants to borrow money using their home equity.
Stress Test and Big ChangesWith the new changes in place, getting a second mortgage or a new loan means that the borrower will have to undergo a stress test. This is a test that will set what credit limit may work for you considering you have a HELOC. The lender will account for an assumed ... more

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