Mortgage Question in a situation where the value of a condo has increased

[Chiggs@mac.com]

I have a question for anyone with expertise in financing investment properties...

I purchased a condo downtown in early 2007 for about $560K and put 10% down. At the time I was planning to live in the unit. I have since purchased a house and have no intention of living in the unit. I will most likely keep it and rent it out as an investment property. The same condo is selling today for $700K. I assume that when I close, I will need to put down another 10% which will mean I will have a mortgage of about $450K on a property worth 700K. I assume that I'll be able to open a mortgage similar to the RBC Homeline Plan based on a value of 700K meaning that I would have a 450K closed segment and an available line of credit for another 110K representing the difference between the balance owing and 80% of the value of the property. Does anyone have any experience doing this?

 

[cdr108]

in theory, yes ... but how much of a mortgage do you have in the house and does/will your TDS exceed 35-40% ?

i believe many banks will also limit the amount of credit available based on lower than current market valuations.

 

[X2 Buyer]

For investment property bank usually will require more than 20%, ie. 35% down of purchase price - sometimes they will reduce the % to 30% even 25% depending on your credit situation.