Author Topic: Canadian Problem: Best Place to Borrow $50000?  (Read 3379 times)

chaitea

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Canadian Problem: Best Place to Borrow $50000?
« on: November 01, 2014, 03:49:24 PM »
The (ex)boyfriend and I bought a place together. We both put down about $45000 into our mortgage. Now the talk of breaking up is a possibility. He borrowed about 20K from his parents. Now if we're not together he doesn't want to own and invest in a property, which is fair but I suggested it as an option. 

If we end up refinancing the mortgage and taking the $50K (the original 45 and then monthly payments since then) out there's a $7500 penalty. Is there something else I can do? My friend says she has a line of credit at just prime. I have about 10K that I could free up into cash, but that would wipe out all my emergency fund money -- and I need to stash up even more if I need to afford the place without him. It was a 5 year variable rate mortgage we signed up for. We're only 6 months into it right now so waiting about 4 years and 12 months for that to end isn't an option.

I have really good credit. I can afford the house without him. I don't have any other debt. I can't borrow from family because they're also all tied up with housing and retirement etc.
« Last Edit: November 01, 2014, 03:52:43 PM by chaitea »

daverobev

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Re: Canadian Problem: Best Place to Borrow $50000?
« Reply #1 on: November 01, 2014, 06:50:18 PM »
Will you still have 20% down? If so, you can possibly convert to a collaterol mortgage and take him off title. We just did that to get our cosigner off. Not cheap - required new title insurance. Then you have a second mortgage or HELOC under an umbrella.

With scotia it's called STEP, Scotia Total Equity Plan.

If less than 20% you'll need an unsecured line of credit. You'll still need to do the title work to get him off title. I guess you'd need to requalify for the mortgage to even get them to take him off title. Unsecured will be much higher interest rate - 6% or so probably as you have good credit, vs 3.5 for a HELOC.

He might just have to grin and bear it for a few years. He can't sell while you live there or without your permission (though neither can you). But of course you'll need to make sure you keep a legal record of how much you put in... Talk to a lawyer, I guess :-/


chaitea

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Re: Canadian Problem: Best Place to Borrow $50000?
« Reply #2 on: November 01, 2014, 09:38:28 PM »
I'd have about 16% of the downpayment. I have some money in TSFA mutual funds, I could get really close to 20% and borrow the remainder to make it to 20% but it would involve wiping out my emergency fund. (Maybe this is what they are for?)

I guess I might have to requalify based on the amount going in, but the house was secured because of my income flow. The boyfriend has side jobs but the hours were inconsistent so we didn't factor that in while qualifying for our mortgage.

How much is new title insurance?

A 0% interest credit card seems awesome even with the 1%. Problem is I won't be able to pay all of it back within the first year so it takes up the 19 or 20% true fee after, right? So I would likely only put in 5-10K and then pay that off slowly over the course of next year.

Maybe Later

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Re: Canadian Problem: Best Place to Borrow $50000?
« Reply #3 on: November 02, 2014, 06:21:11 AM »
Who is your mortgage with?  Most CDN variable rates charge a three month interest charge, not the standard interest differential. Might be less than $7500.

Consider if you sold today how much the place is worth to you (ie, how much in your pocket).  If ~ $100K (your $50K plus his $50K) is roughly 20% of the value then the house is worth, $500,000?  If you sold using a realtor you're going to pay at least $15K in commissions. So if you sell, he's out $7500 anyway.

Maybe it's worth the refinance charge for him to get his money. Is it worth all or part of it to you to get him off the title?

Self-employed-swami

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Re: Canadian Problem: Best Place to Borrow $50000?
« Reply #4 on: November 02, 2014, 06:29:08 AM »
If you can get to 20% down yourself, there are some banks out there that offer a combo mortgage/heloc product.  I have mine with Firstline, but they aren't offering new mortgages now, and have been re-absorbed by CIBC. 

Maybe talk to a mortgage broker about your options.  A good one should have a few possible solutions. 

What province are you in?  Shoot me a private message if you like, I know a good mortgage broker in Alberta, if you are here.

chaitea

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Re: Canadian Problem: Best Place to Borrow $50000?
« Reply #5 on: November 02, 2014, 06:02:22 PM »
We did our mortgage through RMG. Jencor found them for us so it was a restrictive mortgage.

When we purchased, we purchased for 315K. So we downed about 30% total. If he takes his half out it's closer to 15-16% now.

I actually am in Alberta and we went through Jencor but I would be open to other options.

Self-employed-swami

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Re: Canadian Problem: Best Place to Borrow $50000?
« Reply #6 on: November 02, 2014, 06:07:31 PM »
I'll send you a PM :)