Hi golfyeti
I would say im a bit of an expert in banking… and may companies used to offer home equity lines of credit for “free“ when you would have a minimum balance of 30-40K for 3 months that turned into 4 months… at a rate of Prime + 1 or P +.50 (if your lucky)….and if you get it Prime or 3% currently your very very rare.
I know that all banks had to pay for a new reevaluation system because the old was broken so most banking institutions will charge $200.00 for the appraisal (to cover the cost of this new system) and $500.00 to $1500.00 depending on what province you reside in for the legal fee to register your title with land titles.
So let’s do the math
$100K * .04 = $4000.00 per year
OR
$333.33 /month assuming Prime stays where it is.
Please keep in mind that with all the regulations you can only do up to 65% LTV (loan to Value)
The old rule was 80% LTV
Yes this is a good way to get cheap money BUT its also a great way to get an investment that gets put on a never never plan where it never gets paid off cause the money is to cheap the interest write off is good ( don’t comingle funds together keep the investment separate from your day to day borrowing….. right general ledger) and where you have double your exposure 2X's ….Anyways this is a great plan if it all works out.
Its always hardest to sell If your up you want to stay if your down you want to stay with it just incase the stock goes up and when your even you stay there cause you haven’t made any money…. Its even worse when your on the hook for 100K you borrowed
Cheers
Rock
