Posted on: 27th May, 2007 11:39 am
Hi all,
Do you know anything about readvancable mortgages? Apparently you can \\\'readvance\\\' against each monthly payment you make and invest it. Any body know of any area banks that offer them? They might be called something else, not sure. I was reading up on them at zoobat dot com/?p=57. Anybody have any other resources I could read? Any help would be appreciated as I need to renew my mortgage soon!
Mandy
Do you know anything about readvancable mortgages? Apparently you can \\\'readvance\\\' against each monthly payment you make and invest it. Any body know of any area banks that offer them? They might be called something else, not sure. I was reading up on them at zoobat dot com/?p=57. Anybody have any other resources I could read? Any help would be appreciated as I need to renew my mortgage soon!
Mandy
Hi Sweepsplayer,
Welcome to MortgageFit Forums.
Most of the banks offereing a special mortgage called a readvanceable mortgage. But the brand they are using make it difference like, BMO calls it "Readline", Scotia calls it "STEP", and "Homeline" by RBC's.
The banks offer you a big line of credit and divide it into separate components. One of the components could be a mortgage with different terms and interest rates and another one could be the line of credit.
Thanks
Welcome to MortgageFit Forums.
Most of the banks offereing a special mortgage called a readvanceable mortgage. But the brand they are using make it difference like, BMO calls it "Readline", Scotia calls it "STEP", and "Homeline" by RBC's.
The banks offer you a big line of credit and divide it into separate components. One of the components could be a mortgage with different terms and interest rates and another one could be the line of credit.
Thanks
Hi Sweepsplayer,
The mortgage is split into 2 parts: One part is mortgage (bad debt) and the other part is investment line of credit (good debt). As you make the payment of your bad debt, the equal amount gets re-advanced to be invested. At the time deduction, total interests accumulated in your good debt get deduct from your taxable income. Thus, paying off mortgage earlier you can save lots of money.
The mortgage is split into 2 parts: One part is mortgage (bad debt) and the other part is investment line of credit (good debt). As you make the payment of your bad debt, the equal amount gets re-advanced to be invested. At the time deduction, total interests accumulated in your good debt get deduct from your taxable income. Thus, paying off mortgage earlier you can save lots of money.
this type of mortgage is more popular in canada
in this type of mortgage as the borrower makes the monthly payments, this amount is at the same time readvanced to him so that he can reinvest it in stocks or other type of real estate. Interest on the readvanced amount is tax deductible as it is utilized for investing purposes.
in this type of mortgage as the borrower makes the monthly payments, this amount is at the same time readvanced to him so that he can reinvest it in stocks or other type of real estate. Interest on the readvanced amount is tax deductible as it is utilized for investing purposes.
What is the tax implications on interest?
Welcome Miguel.
In case of a readvanceable mortgage, the interest on the amount that is readvanced as Heloc is tax deductible because it is used for investment purpose. But you should itemize our deductions for that. Those following standard deduction cannot use mortgage interest for getting further deductions.
Every time you get the readvanced money and the tax refunds to invest, the more interest you claim as expense!
Thanks.
In case of a readvanceable mortgage, the interest on the amount that is readvanced as Heloc is tax deductible because it is used for investment purpose. But you should itemize our deductions for that. Those following standard deduction cannot use mortgage interest for getting further deductions.
Every time you get the readvanced money and the tax refunds to invest, the more interest you claim as expense!
Thanks.
Hi Miguel,
Helping user is absolutely right. Readvanceable mortgage interest is tax deductible. Every time you pay a lender in Readvanceable mortgage, you are actually reducing the principal of the mortgage
Best of luck,
Larry
Helping user is absolutely right. Readvanceable mortgage interest is tax deductible. Every time you pay a lender in Readvanceable mortgage, you are actually reducing the principal of the mortgage
Best of luck,
Larry