Comments on: Ed Rempel’s Picks for The Best Smith Manoeuvre Mortgage I http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm Building Wealth through Saving and Investing Sun, 12 Feb 2012 23:42:26 -0330 http://wordpress.org/?v=abc hourly 1 By: Ed Rempel http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-121828 Ed Rempel Mon, 03 Oct 2011 04:05:02 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-121828 Hi Jungle, Yes, the Scotia STEP is not bad for the SM now that they have improved it. We find that these improvements are not the same everywhere (we think they have been releasing them branch by branch). You may or may not get all the options, depending on obscure options you take when signing up. For example, we have some clients that don't have the $5,000 minimum and some that are not offered the automatic readvancing yet. Scotia still does not allow investing directly from the credit line automatically. We often use automatic monthly investments. Plus for clients with an investment loan, the interest payments can come directly from a credit line for tax purposes, but this does not work at Scotia. We find that their rates are usually relatively competitive, but not usually the lowest. Ed Hi Jungle,

Yes, the Scotia STEP is not bad for the SM now that they have improved it. We find that these improvements are not the same everywhere (we think they have been releasing them branch by branch). You may or may not get all the options, depending on obscure options you take when signing up.

For example, we have some clients that don’t have the $5,000 minimum and some that are not offered the automatic readvancing yet.

Scotia still does not allow investing directly from the credit line automatically. We often use automatic monthly investments. Plus for clients with an investment loan, the interest payments can come directly from a credit line for tax purposes, but this does not work at Scotia.

We find that their rates are usually relatively competitive, but not usually the lowest.

Ed

]]> By: Jungle http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-121634 Jungle Thu, 15 Sep 2011 16:00:14 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-121634 This post is old and outdated. We have been doing the SM with the Scotia STEP for a while. Scotia made some changes in the last few years, now allowing "auto limit increase" to the HELOC as you pay down the principal. However please note, you must have title insurance only from a company called "First Canadian Title" on your property. I do not know why this is a requirement by Scotia, probably from teird selling. Also the minimum size of HELOC must be $5000. Also you can sent bill payments (no fees) from the HELOC to your brokerage. I believe any brokerage will accept bill payments as a way to fund your stocks. The HELOC can be set up as interest only payment too. Scotia also offers 1 year fixed rate mortgages, with option to early renew any time 6 months before term expiry. This post is old and outdated.

We have been doing the SM with the Scotia STEP for a while. Scotia made some changes in the last few years, now allowing “auto limit increase” to the HELOC as you pay down the principal.

However please note, you must have title insurance only from a company called “First Canadian Title” on your property. I do not know why this is a requirement by Scotia, probably from teird selling. Also the minimum size of HELOC must be $5000.

Also you can sent bill payments (no fees) from the HELOC to your brokerage. I believe any brokerage will accept bill payments as a way to fund your stocks. The HELOC can be set up as interest only payment too.

Scotia also offers 1 year fixed rate mortgages, with option to early renew any time 6 months before term expiry.

]]> By: Jamkomo http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-118399 Jamkomo Mon, 31 Jan 2011 07:04:40 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-118399 My Institution has a mortgage similar to Scotiabank's STEP. While you might not recommend it since one needs to increase the HELOC manually, the mortgage itself gives me a special interest rate that is really good (2.6% - this is posted Jan 2011), plus it's open. So, I'm going to be doing it manually. My Institution has a mortgage similar to Scotiabank’s STEP. While you might not recommend it since one needs to increase the HELOC manually, the mortgage itself gives me a special interest rate that is really good (2.6% – this is posted Jan 2011), plus it’s open.

So, I’m going to be doing it manually.

]]> By: Ken http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-115371 Ken Fri, 17 Sep 2010 06:08:09 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-115371 My choice for the Smith Manoeuvre is the RBC Homeline plan. I highly recommend the RBC homeline plan. Here is a brief summary why it's my choice and why I chose the Homeline over the Merix Heloc. I didn't consider Scotiabank as they report their mortgages to the Credit Bureau. I consider that on par with the bank faxing your balance sheet around town, which I completely disagree with. I didn't go with Firstline as they seem gun shy about HELOC's this past few years and my other choice was National Bank, which lost my business as they didn't have the courtesy of responding to my application. I now have two Homeline Plans. One for my principal residence and one for my Rental property. My mortgage principal is instantly readvanced as soon as the mortgage payment is made. It can then be invested through RBC direct investing on the same day, transferred as an internet bill payment (no charge but takes 2 days), or you can set up a PAD from your RBC chequing account (you will have to manually transfer the funds from your LOC to chequing). You are required to set up an RBC chequing account with a Homeline but you don't have to use it or bank with RBC as your mortgage payment can be debited from your own bank. RBC will waive the chequing account fee but expect a sales pitch as they try to earn your day to day banking business. As far as interest rates go, RBC posted rates are in line with the big banks, but when it's time to negotiate, they will match or beat the discounted rates of any competitor. They currently blow Merix out of the water. My new Homeline LOC is P +.5 compared to Merix at P +1 and I have one mortgage segment at P -.7, compared to Merix's variable rate of P -.5. Also, this mortgage is complely conventional with no CMHC involvement. My understanding is that Merix insures it's mortgages and pays the premium, which keeps CMHC in the loop and in your business. I prefer a completely conventional mortgage with no CMHC or Genworth involvement. My original Homeline was negotiated prior to the financial meltdown in 2008 and RBC did not do what TD did to their clients and bump up the rate of my LOC. I have a friend with a TD Heloc and he is still fired up that TD increased his secured LOC from P to P +1. RBC did not do that to their Homeline clients! My 1st homeline was set up with a LOC at Prime and it has remained at prime since inception. I have two mortgage segments with my orignial homeline. One open and one closed. Both variable at P -.4 RBC loves Homeline plan customers. They make lots of interest and you hopefully make more interest from your investments. It's a win win relationship. The Homeline can have 5 mortgage segments, which makes it very manageable and should meet most people's needs. The statements are clear and concise and all transactions are instantly updated online. One negative with the Homeline is that RBC reports your LOC balance to the Credit Bureau and a maxed out revolving credit line is the worst thing possible in the FICO credit scoring formula. It absolutely kills your beacon score. I had decided to lease a new compact car last year (a 12,000 Hyundai) for 200/month and with a net worth of 250K and perfect credit, I was declined because the maxed out Homeline LOC was like a huge gorilla sitting on my credit report. Other lenders you deal with don't care if your LOC is a fully secured investment loan. To the lender, they see you as a person with a huge maxed out LOC and a big risk. My beacon went from 760+ down to 680 just by carrying a maxed out 40,000 LOC. The solution is easy. Once you accumulate a large LOC balance, convert it back into a mortgage segment. RBC resets your LOC back to nil and that is the LOC balance reported to the bureau. By doing that, my beacon jumped back up to 730 in one month and I was able to easily obtain my lease. I'm only a few years into my Smith Manoeuvre Journey and so far I'd say I've broken even but this is a 10 - 15 year plan and I'm confident that I will pay my mortgages off sooner than with two 25 year conventional mortgages. I also like that I'm taking an active role in my own finances. Best of luck to everyone out there! My choice for the Smith Manoeuvre is the RBC Homeline plan. I highly recommend the RBC homeline plan. Here is a brief summary why it’s my choice and why I chose the Homeline over the Merix Heloc. I didn’t consider Scotiabank as they report their mortgages to the Credit Bureau. I consider that on par with the bank faxing your balance sheet around town, which I completely disagree with. I didn’t go with Firstline as they seem gun shy about HELOC’s this past few years and my other choice was National Bank, which lost my business as they didn’t have the courtesy of responding to my application.
I now have two Homeline Plans. One for my principal residence and one for my Rental property. My mortgage principal is instantly readvanced as soon as the mortgage payment is made. It can then be invested through RBC direct investing on the same day, transferred as an internet bill payment (no charge but takes 2 days), or you can set up a PAD from your RBC chequing account (you will have to manually transfer the funds from your LOC to chequing). You are required to set up an RBC chequing account with a Homeline but you don’t have to use it or bank with RBC as your mortgage payment can be debited from your own bank. RBC will waive the chequing account fee but expect a sales pitch as they try to earn your day to day banking business.
As far as interest rates go, RBC posted rates are in line with the big banks, but when it’s time to negotiate, they will match or beat the discounted rates of any competitor. They currently blow Merix out of the water. My new Homeline LOC is P +.5 compared to Merix at P +1 and I have one mortgage segment at P -.7, compared to Merix’s variable rate of P -.5. Also, this mortgage is complely conventional with no CMHC involvement. My understanding is that Merix insures it’s mortgages and pays the premium, which keeps CMHC in the loop and in your business. I prefer a completely conventional mortgage with no CMHC or Genworth involvement. My original Homeline was negotiated prior to the financial meltdown in 2008 and RBC did not do what TD did to their clients and bump up the rate of my LOC. I have a friend with a TD Heloc and he is still fired up that TD increased his secured LOC from P to P +1. RBC did not do that to their Homeline clients! My 1st homeline was set up with a LOC at Prime and it has remained at prime since inception. I have two mortgage segments with my orignial homeline. One open and one closed. Both variable at P -.4
RBC loves Homeline plan customers. They make lots of interest and you hopefully make more interest from your investments. It’s a win win relationship. The Homeline can have 5 mortgage segments, which makes it very manageable and should meet most people’s needs. The statements are clear and concise and all transactions are instantly updated online.
One negative with the Homeline is that RBC reports your LOC balance to the Credit Bureau and a maxed out revolving credit line is the worst thing possible in the FICO credit scoring formula. It absolutely kills your beacon score. I had decided to lease a new compact car last year (a 12,000 Hyundai) for 200/month and with a net worth of 250K and perfect credit, I was declined because the maxed out Homeline LOC was like a huge gorilla sitting on my credit report. Other lenders you deal with don’t care if your LOC is a fully secured investment loan. To the lender, they see you as a person with a huge maxed out LOC and a big risk. My beacon went from 760+ down to 680 just by carrying a maxed out 40,000 LOC. The solution is easy. Once you accumulate a large LOC balance, convert it back into a mortgage segment. RBC resets your LOC back to nil and that is the LOC balance reported to the bureau. By doing that, my beacon jumped back up to 730 in one month and I was able to easily obtain my lease.

I’m only a few years into my Smith Manoeuvre Journey and so far I’d say I’ve broken even but this is a 10 – 15 year plan and I’m confident that I will pay my mortgages off sooner than with two 25 year conventional mortgages. I also like that I’m taking an active role in my own finances.

Best of luck to everyone out there!

]]> By: Engineer http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-102338 Engineer Wed, 26 Aug 2009 22:01:46 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-102338 What do people think about National Bank All in One Right Now? I have read the posts that follow and some of them are older, it seems the product has changed somewhat. I am able to get the LOC portion at prime+0% because I am an engineer so that part is attractive (haven't been able to get this low anywhere else). We are also able to put the entire mortgage under the LOC portion and only pay prime+0 on that too. Option to lock in at any time. What do people think of the product currently? We are looking at it in terms of the Smith Manouvre What do people think about National Bank All in One Right Now?
I have read the posts that follow and some of them are older, it seems the product has changed somewhat.

I am able to get the LOC portion at prime+0% because I am an engineer so that part is attractive (haven’t been able to get this low anywhere else).

We are also able to put the entire mortgage under the LOC portion and only pay prime+0 on that too. Option to lock in at any time.

What do people think of the product currently? We are looking at it in terms of the Smith Manouvre

]]> By: Ed Rempel http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-92818 Ed Rempel Sun, 19 Jul 2009 03:47:16 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-92818 Hi Shane, I just noticed your post. Automating the capitalization by having 2 credit lines pay each other's interst payments does not really work with most institutions. Many don't allow preauthorized payments to be paid directly from the credit line, and quite a few don't have unsecured credit lines with interest only payments. You also need to have the 2 credit lines be at different banks to make it work. However, capitalizing is easy anyway. It is only one manual transaction each month (2 if you are at a less convenient institution). Just pay the interest payment and then withdraw the exact amount from the credit line to repay yourself. For example, if you are charged $100.01 interest, take that exact amount back from the SM credit line, either with an on-line transfer or by writing your self a cheque. This requires that you keep accurate records, but is easily done. To simplify your record-keeping, you could open a separate bank account just for SM transaction, but it is not really necessary. Ed Hi Shane,

I just noticed your post. Automating the capitalization by having 2 credit lines pay each other’s interst payments does not really work with most institutions. Many don’t allow preauthorized payments to be paid directly from the credit line, and quite a few don’t have unsecured credit lines with interest only payments.

You also need to have the 2 credit lines be at different banks to make it work.

However, capitalizing is easy anyway. It is only one manual transaction each month (2 if you are at a less convenient institution). Just pay the interest payment and then withdraw the exact amount from the credit line to repay yourself.

For example, if you are charged $100.01 interest, take that exact amount back from the SM credit line, either with an on-line transfer or by writing your self a cheque.

This requires that you keep accurate records, but is easily done.

To simplify your record-keeping, you could open a separate bank account just for SM transaction, but it is not really necessary.

Ed

]]> By: shane http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-86376 shane Mon, 08 Jun 2009 15:57:39 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-86376 Hi Ed, Good articles by the way, i'm enjoying them. I'm curious though as to how you "capitalize the interest" from the HELOC's on the bank products? I know it can be automated with BMO's product and with the National bank we just set up a second small line of credit (as per the smithmanoeuvre book) and make the interest payments back and forth each month from the HELOC and the 2nd small line of credit. (interest only of course). What other products (ie. TD/Scotia/Royal/Merix) can you do this with or better yet, which are the easiest to set up the capitalization of the interest in your opinion? Thanks, Shane Hi Ed,

Good articles by the way, i’m enjoying them. I’m curious though as to how you “capitalize the interest” from the HELOC’s on the bank products? I know it can be automated with BMO’s product and with the National bank we just set up a second small line of credit (as per the smithmanoeuvre book) and make the interest payments back and forth each month from the HELOC and the 2nd small line of credit. (interest only of course). What other products (ie. TD/Scotia/Royal/Merix) can you do this with or better yet, which are the easiest to set up the capitalization of the interest in your opinion?

Thanks,
Shane

]]> By: wx_junkie http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-73905 wx_junkie Wed, 18 Mar 2009 18:24:22 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-73905 So... I heard rumor, and have since received confirmation from Scotiabank that they now have implemented this week, automatic HELOC increases on their STEP. So… I heard rumor, and have since received confirmation from Scotiabank that they now have implemented this week, automatic HELOC increases on their STEP.

]]> By: pete http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-59494 pete Tue, 04 Nov 2008 14:42:51 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-59494 hello all i have been reading a lot about the sm on this wonderful site for about 6 mos and i am taking the plunge at the end of this month. looks like my timing may be ideal as the markets have pretty much hit rock bottom already. I was going to go with the tdmp out of toronto but they have increased all there costs for setting it up but the guys who were going to do it (mortgage broker and investor) will help us do it by ourselves. The mortgage man is suggesting national bank b/c they seem to have the best variable(5%) and 5yr fixed (5.69%) and heloc is at prime.I know this bank is not on this list so i was wondering if any body has experiences with them or any thoughts. I was planning on going variable but the 5yr fixed is close so i might change my mind as my bad debt would be converted in approx 6 yrs do u think i should lock in or will rates go down further any input would be great. another bonus i guess of national bank i was told that all the accounts i would need would be just with them making it easier. hello all i have been reading a lot about the sm on this wonderful site for about 6 mos and i am taking the plunge at the end of this month. looks like my timing may be ideal as the markets have pretty much hit rock bottom already. I was going to go with the tdmp out of toronto but they have increased all there costs for setting it up but the guys who were going to do it (mortgage broker and investor) will help us do it by ourselves. The mortgage man is suggesting national bank b/c they seem to have the best variable(5%) and 5yr fixed (5.69%) and heloc is at prime.I know this bank is not on this list so i was wondering if any body has experiences with them or any thoughts. I was planning on going variable but the 5yr fixed is close so i might change my mind as my bad debt would be converted in approx 6 yrs do u think i should lock in or will rates go down further any input would be great. another bonus i guess of national bank i was told that all the accounts i would need would be just with them making it easier.

]]> By: Ed Rempel http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-50086 Ed Rempel Sat, 30 Aug 2008 03:24:41 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-50086 Hi Gill, I just noticed your post. Are you tight on cash flow or equity? You don't have to pay the penalty from cash. It can be rolled into your mortgage. You don't want to break your mortgage because you are short of funds? Will it save you money when you compare the interest rate savings to the penalty? Rates tend to be quite a bit higher at Manulife. We are getting 4.0% now on the fixed portion and it sounds like interest rates may decline even further this year. If it saves you money, then there should be a way to be able to find the money. It sounds like you are using the main Manulife One account as the investment portion. That may work as a second mortgage, buth would be difficult as a first. It does compound the interest automatically, but this can easily be done manually at any bank with one manual transaction each month. Many mortgages still don't appear on the credit report. They announced last year that they were going to start putting them all on, but it does not seem to have happened yet. RBC is no more difficult to transfer out than any other bank. Scotia is the one that we have sometimes had more difficulty transferring out from. Ed Hi Gill,

I just noticed your post. Are you tight on cash flow or equity? You don’t have to pay the penalty from cash. It can be rolled into your mortgage.

You don’t want to break your mortgage because you are short of funds? Will it save you money when you compare the interest rate savings to the penalty? Rates tend to be quite a bit higher at Manulife. We are getting 4.0% now on the fixed portion and it sounds like interest rates may decline even further this year. If it saves you money, then there should be a way to be able to find the money.

It sounds like you are using the main Manulife One account as the investment portion. That may work as a second mortgage, buth would be difficult as a first. It does compound the interest automatically, but this can easily be done manually at any bank with one manual transaction each month.

Many mortgages still don’t appear on the credit report. They announced last year that they were going to start putting them all on, but it does not seem to have happened yet.

RBC is no more difficult to transfer out than any other bank. Scotia is the one that we have sometimes had more difficulty transferring out from.

Ed

]]> By: Gill http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-45309 Gill Thu, 24 Jul 2008 05:16:23 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-45309 I have a 5 year fixed mortgage, and researched the SM after I bought my house. We're very tight on funds so I can't afford to break my mortgage. I chose M1 second position to start my SM for several reasons. 1. multiple accounts. One for investments, one non-deductible and for one for business cash flow. I plan to pay off the fixed mortgage $5000 at a time and use the cash flow and dividends to pay off the "chequing non-deductable." 2. M1 doesn't require interest payback - I can let the investment loan to accumulate while I pay off the non-deductable. lesser reasons: 3. Because manualife is an insurance company the loan doesn't appear on my credit report (can anyone confirm?) 4. RBC Homeline has strict rules - make it difficult to move away even after the term is up (can anyone confirm?) I have a 5 year fixed mortgage, and researched the SM after I bought my house. We’re very tight on funds so I can’t afford to break my mortgage. I chose M1 second position to start my SM for several reasons.
1. multiple accounts. One for investments, one non-deductible and for one for business cash flow. I plan to pay off the fixed mortgage $5000 at a time and use the cash flow and dividends to pay off the “chequing non-deductable.”

2. M1 doesn’t require interest payback – I can let the investment loan to accumulate while I pay off the non-deductable.

lesser reasons:
3. Because manualife is an insurance company the loan doesn’t appear on my credit report (can anyone confirm?)

4. RBC Homeline has strict rules – make it difficult to move away even after the term is up (can anyone confirm?)

]]> By: The Smith Manoeuvre Resource | Million Dollar Journey http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-27294 The Smith Manoeuvre Resource | Million Dollar Journey Thu, 06 Mar 2008 17:23:02 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-27294 [...] Recommended Smith Manoeuvre Mortgages (Ed Rempel) [...]

[...] Recommended Smith Manoeuvre Mortgages (Ed Rempel) [...]

]]> By: MadMex http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-27289 MadMex Thu, 06 Mar 2008 16:48:40 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-27289 Hello, I have been reading many of these blogs on MDJ with great interest. I have plans to implement the Smith Manoeuvre at some point and I am researching the options available. The HELOC product offered by TD is recommended by Ed but I do not see many details or comments in the blogs or comments. Does anyone have any stories, caveats or suggestions that relate to the TD HELOC? Thank you in advance. Hello,

I have been reading many of these blogs on MDJ with great interest. I have plans to implement the Smith Manoeuvre at some point and I am researching the options available.

The HELOC product offered by TD is recommended by Ed but I do not see many details or comments in the blogs or comments.

Does anyone have any stories, caveats or suggestions that relate to the TD HELOC?

Thank you in advance.

]]> By: alex http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-24508 alex Mon, 04 Feb 2008 15:01:56 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-24508 ed, i would assume that national would waive their fees for readvancing this time around (we'll see). because if they reduce the minimum from $5000 to say $100 or even $1- any avid investor would be hammered by service charges/fees making it not even worth the change in the 1st place! and yes, i don't think developing their mortgages to cater to SM is a priority for the reasons you mentioned. most lenders push to use them for shopping, etc..though, if i were a bank, wouldn't i be better served by encouraging clients to invest back with them? instead of spending the money on shoes? this way, they get the constant credit line interest AND the investments- wrapping their clients for life...isn't that the bank's mandate??? bank's improve retention, constant interest revenue & constant growing investment asset base- client's portfolio grows with no money out of pocket (and even better WITH extra money out of pocket!) its' a win-win for everyone!...so what are we missing here??? it's one meeting in a room with product developers, one pen, one piece of paper & a short time frame to implement?? hmmm, sounds difficult. ed,
i would assume that national would waive their fees for readvancing this time around (we’ll see). because if they reduce the minimum from $5000 to say $100 or even $1- any avid investor would be hammered by service charges/fees making it not even worth the change in the 1st place! and yes, i don’t think developing their mortgages to cater to SM is a priority for the reasons you mentioned. most lenders push to use them for shopping, etc..though, if i were a bank, wouldn’t i be better served by encouraging clients to invest back with them? instead of spending the money on shoes? this way, they get the constant credit line interest AND the investments- wrapping their clients for life…isn’t that the bank’s mandate??? bank’s improve retention, constant interest revenue & constant growing investment asset base- client’s portfolio grows with no money out of pocket (and even better WITH extra money out of pocket!) its’ a win-win for everyone!…so what are we missing here??? it’s one meeting in a room with product developers, one pen, one piece of paper & a short time frame to implement??
hmmm, sounds difficult.

]]> By: Mortgage Broker http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-24455 Mortgage Broker Sun, 03 Feb 2008 21:11:41 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-24455 Hi Ed! That's true to a large extent. It's always good to take lender promises with a grain of salt. Firstline, for example, has been planning a variable for a few years on their Matrix. I do think readvanceables are catching on though. A lot of our clients take them for reasons apart from the Smith Manoeuvre. Some, for example, will use them as a source of funds for down payments on future investment properties. Others like the peace of mind the built-in credit line affords--especially self-employed/commissioned individuals. Readvanceables are better than other options for these purposes because clients don't have to reapply to get the credit. Plus the readvanceable LOCs are often offered at preferential rates to standalone credit lines and often not reported to credit bureaus. Re: NBC. We're hearing they'll drop the $5000 readvance minimum for clients who lock-in fixed portions. (Note: for people who just use NBC's All-in-One at prime, there is no minimum--but the rate isn't so great obviously). I'm also not sure why they charge that tiny fee. Like with Manulife, it seems somewhat ridiculous given the profit made from interest. Enjoy the Superbowl! -Melanie Hi Ed!

That’s true to a large extent. It’s always good to take lender promises with a grain of salt. Firstline, for example, has been planning a variable for a few years on their Matrix.

I do think readvanceables are catching on though. A lot of our clients take them for reasons apart from the Smith Manoeuvre. Some, for example, will use them as a source of funds for down payments on future investment properties. Others like the peace of mind the built-in credit line affords–especially self-employed/commissioned individuals.

Readvanceables are better than other options for these purposes because clients don’t have to reapply to get the credit. Plus the readvanceable LOCs are often offered at preferential rates to standalone credit lines and often not reported to credit bureaus.

Re: NBC. We’re hearing they’ll drop the $5000 readvance minimum for clients who lock-in fixed portions. (Note: for people who just use NBC’s All-in-One at prime, there is no minimum–but the rate isn’t so great obviously). I’m also not sure why they charge that tiny fee. Like with Manulife, it seems somewhat ridiculous given the profit made from interest.

Enjoy the Superbowl!
-Melanie

]]> By: Mortgage Broker http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-24452 Mortgage Broker Sun, 03 Feb 2008 20:44:07 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-24452 Hi Alex, Re: Flexstar. Yes it's pretty sad they shelved it so soon. But it was still a great product and justified the all the accolades it received. Hopefully it will be back sooner than later! Hi Alex, Re: Flexstar. Yes it’s pretty sad they shelved it so soon. But it was still a great product and justified the all the accolades it received. Hopefully it will be back sooner than later!

]]> By: Ed Rempel http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-24434 Ed Rempel Sun, 03 Feb 2008 20:33:06 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-24434 Hi Alex & Rob, We've learned to not believe any of these promises until the product is out. Every financial institution that has a readvanceable has been promising improvements. Scotia has been promising a better product for more than 5 years. I guess the readvanceable is still not a mainstream product, since a reletively small number of people do the SM. Readvanceables are mainly sold as a product to finanace additional spending, in which any product is fine. Maybe that is why it is just not priority for them. So National says they will make it automatic? Will they also eliminate their high minimum advancement ($5-10,000)? We have one client at National with an All-In-One that has been itching to do the SM, which he obviously cannot do at National. His is finally due this year and we will move it so he can start the SM - unless they finally have a good product. Why would they have to charge a fee - is this not automatic involving no labour? Ed Hi Alex & Rob,

We’ve learned to not believe any of these promises until the product is out. Every financial institution that has a readvanceable has been promising improvements. Scotia has been promising a better product for more than 5 years.

I guess the readvanceable is still not a mainstream product, since a reletively small number of people do the SM. Readvanceables are mainly sold as a product to finanace additional spending, in which any product is fine.

Maybe that is why it is just not priority for them.

So National says they will make it automatic? Will they also eliminate their high minimum advancement ($5-10,000)?

We have one client at National with an All-In-One that has been itching to do the SM, which he obviously cannot do at National. His is finally due this year and we will move it so he can start the SM – unless they finally have a good product. Why would they have to charge a fee – is this not automatic involving no labour?

Ed

]]> By: alex http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-24169 alex Thu, 31 Jan 2008 20:01:41 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-24169 FYI, MCAP has, effective immediately, discontinued their flexstar mortgage product! apparently the 'appetite was not there', or so they say? i'm sure more info, as to why, will be leaking over the next while. they are going back to the drawing board to see if they can tweak the product for a possible re-launch down the road- no news on when, or even IF, it will resurface. so much for 'mortgage of the year'- eh melanie? too bad...i thought their the annuity structure was fantastic! alex FYI,
MCAP has, effective immediately, discontinued their flexstar mortgage product! apparently the ‘appetite was not there’, or so they say? i’m sure more info, as to why, will be leaking over the next while. they are going back to the drawing board to see if they can tweak the product for a possible re-launch down the road- no news on when, or even IF, it will resurface.

so much for ‘mortgage of the year’- eh melanie? too bad…i thought their the annuity structure was fantastic!

alex

]]> By: Mortgage Broker http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-23910 Mortgage Broker Tue, 29 Jan 2008 20:47:54 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-23910 I'm with you Alex. For some, $2.50/mo is a pittance in the big scheme of things. Nonetheless, account fees like this are so nickel and dimey!!! Cheers, Rob I’m with you Alex. For some, $2.50/mo is a pittance in the big scheme of things. Nonetheless, account fees like this are so nickel and dimey!!!

Cheers,
Rob

]]> By: alex http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm/comment-page-2#comment-23849 alex Tue, 29 Jan 2008 18:57:49 +0000 http://www.milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-i.htm#comment-23849 robert/ed, apparently, the change with national bank (around april 21st) is that it will be an 'automatic' re-advance once their fixed or variable component is paid down- as opposed to the current 'manual' request. still, for 1 or more sub-accounts, a $2.50 monthly charge will apply ($30/yr for admin cost, labour?) ehhh, i guess that makes sense- would be nice if it was all free though :) robert/ed,
apparently, the change with national bank (around april 21st) is that it will be an ‘automatic’ re-advance once their fixed or variable component is paid down- as opposed to the current ‘manual’ request.
still, for 1 or more sub-accounts, a $2.50 monthly charge will apply ($30/yr for admin cost, labour?) ehhh, i guess that makes sense- would be nice if it was all free though :)

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