This is an article that deceives you about your loan. If you don’t like it, please close it immediately.

This is an article that teaches you how to borrow money from banks. People who have never been able to borrow money before need to study hard, imitate it carefully, and become a master of borrowing money as soon as possible.

Why learn to borrow money? One is low interest rates, and the other is to combat the depreciation of the US dollar. Low interest rates make it possible to invest with loans. It is easy to understand that you can use loans to accumulate personal assets and form passive income to achieve the goal of early retirement. You heard it right, yes, the dollar is going to depreciate. The US dollar is originally the anchor of various currencies. Only other currencies appreciate or depreciate relative to the US dollar. I have never heard of the US dollar appreciating or depreciating. It will take a long time for the US dollar to depreciate, because the last time the US dollar depreciated was in 1971, the United States took the initiative to destroy the Bretton Woods system. It agreed that 1 ounce of gold was equal to 35 US dollars and could be exchanged at any time. The Fed's bottomless money issuance in 2020 has once again fundamentally undermined the credit of the United States and the U.S. dollar. It has made a desperate move to depreciate the U.S. dollar to prevent the country's stock prices from falling and U.S. dollar assets from depreciating. It has loosened the anchor of the currencies of other countries around the world and given other countries two options: inflation or asset appreciation.

Refinance in English means refinance. When will you be able to withdraw cash from your existing investment house through an additional mortgage and make the down payment for your next investment house? When will you complete the process of pushing the stone up the mountain, bid farewell to the suffering of Sisyphus, and reach the milestone of being able to push the stone down the mountain. I'm on Youtube "We are forced to invest in order to balance our lifetime income" The meaning of this sentence is fully explained in 6 episodes of video lectures. These 6 episodes of lectures have been viewed by 40,000 people so far. They are the most complete series of lectures on borrowing skills and are changing many people's investment concepts. There are many people who accompany real estate investment. They watch others borrow money and watch the value of other people's houses increase, but they dare not get involved. They have never taken a step closer to the milestone on the mountain. However, housing prices defy the foreign buyers tax, B20, and the epidemic, and they are getting higher and higher. The depreciation of the US dollar will push up the asset prices of all developed countries. The mountain will get higher and higher. Those who don't start will really have to stop at the mountain. Without further ado, let’s give a few examples and see how others use the magic tool to climb mountains.

01  With a mediocre income, you can invest in real estate by moving house

Many people say that real estate investment requires a high income, and people with average incomes can only run with it. I don’t think that you can invest in real estate only if you have a high income. Even if you have a mediocre income, there are ways to make up for your shortcomings. How to make up for it? That’s it moving。

With an annual income of 60,000, a borrowing capacity of 300,000, and a down payment of 20%, you can buy a house A for 375,000, with a 3-year fixed interest rate of 2% and a 30-year repayment period. After 3 years, the loan matures, the savings deposit is 30,000, the loan balance is 278,000, the income has increased to 65,000, and the house price has increased to 400,000. Press again, The new loan amount is 325,000, with a cash withdrawal of 47,000, plus a deposit of 30,000, using 77,000 as a down payment, buying a new home B for 385,000, and renting out the original home. Realized the first investment in real estate. By analogy, before buying House C as your own home, you can add a mortgage on House B and take out cash as a down payment. You see, people with low incomes can participate in real estate investment by moving.

Now that the process is finished, let’s explain it. When your income is limited, for example, if you are single, you can achieve the purpose of real estate investment by moving. With a down payment of 20%, you can borrow 5 times your annual income. You can start the car as early as possible, and the down payment can last until you get older. Therefore, the fastest time to buy a house is to work full-time and pass the probation period. After getting on car A, I didn’t get out anymore. As long as you buy a house, don’t sell it. It’s always fun to buy a house. After the loan expires, you must increase your mortgage. Remember, don’t miss any opportunity when the loan contract expires. If you can, increase your mortgage, and if you can’t create conditions, you must increase your mortgage. After withdrawing the cash, add your own savings, and apply to the bank for a loan for the next home B. The bank will treat the existing home A as a rental house. By evaluating the economic rental income, they can estimate how much you can rent the original home A if you no longer live in it. Use a certain proportion of the rent to offset A's debt. If the rent cannot cover all debts, the available income that can be used to apply for home B will be reduced accordingly. Therefore, the location of A is very important. After buying B with a loan, A becomes the first investment house. What should I do when buying C? Just like the same method, I won’t repeat it.

The first rule of mortgage remortgage: Don’t easily remortgage your own home. Unless you want to change your home and keep the original home, you need to remortgage your current home before buying a new home. If you don’t remortgage, you will easily become a mortgagee. Mortgage plant 。 Regarding the topic of mortgage vegetative state, I talked about it in the "Henry Wang Real Estate Investment Lecture, January 12, 2019, Toronto Offline Event at Landlord.com". There is now a video material on YouTube. At that time, the audience burst into laughter, thinking that I was talking about others. Many people found themselves in a vegetative state after returning home.

That's the calculation, but if someone with an income of 60,000 wants to do this in Metropolis and Greater Vancouver, the biggest problem is that it is almost impossible to buy a house below 400,000. The world has been at peace for too long. From 1945 to now, the imperialists have stopped fighting each other. The number of proletarians is getting smaller and smaller, and they can no longer make trouble. Asset prices have been rising step by step in peacetime. Later waves will increasingly rely on the efforts of the front wave when purchasing assets. If the front wave does not work hard, the back wave will not be able to reach the first step. Canada is a country of immigrants. New labor force is always coming in, and income increases very slowly. If you can't buy a house, it's because you don't have enough support for your family.

02  Is it safe to buy an investment property directly instead of buying your own home?

Most people immigrate to Canada to live and work in peace and contentment, not to receive relief or to hunt for gold. Housing is a very important part of life, and real estate investment is secondary.

If the new immigrant's main house is purchased in the name of a party without Canadian income, the best investment method is for the party with Canadian income to take a loan to buy an investment property. This is how the IT guy bought 7 investment properties in 2 years. After all, there are very few people who rush up the mountain in one breath, but standing on the top of the mountain is a great feeling, and you can roll the stone down the mountain. That is, you can mortgage an investment house, take out cash as a down payment, buy an investment house, and borrow the down payment for the next investment house. You don’t need to invest your own funds.

If you are single and live in your parents' home, the same goes for you. If you have a stable income, you can buy investment house A and add a mortgage when it matures. When you buy investment house B, you can worry less about your parents. When I bought c , I gnawed less, and gradually became independent and stronger. When the income and housing prices are high enough, you can cash out with a mortgage, share the investment results with the old people you bitten, and repay the old people's original angel capital. Many people hope that I will spread investment knowledge to their next generation. I think the words and deeds of parents are the most important. One of my colleagues, a non-Chinese, started working when he was 19 years old. After the probation period, he invested with the help of his parents. Before getting married, he already owned 5 properties. Such a former waver is very responsible. Don't be afraid of chewing old food, chew hard when you can, and just pay back double in the future.

People who have no housing debt and a reasonable income can directly buy an investment property. I don’t recommend renting a house to buy an investment property, because there is no capital gains tax when selling a home in Canada, and the value-added part is not taxed. This policy must be fully utilized.

The second rule of mortgage refinancing: People who have no home-ownership debt in their name are most likely to rush all the way to the top of the mountain. They can remortgage whenever and wherever they see the opportunity, maximizing the use of bank money and purchasing more assets.

03 When you press more, it is the time to correct the error.

Most people don’t understand Canada’s mortgage policies and products when they buy their first home, and they make more or less mistakes. The chance to correct the mistake is to press again . There are two types of mortgage products in Canada: traditional mortgages and portfolio loans with lines of credit.

When you first buy your home, you don’t need to use a combination loan with a limit, just choose a traditional mortgage loan. If you are satisfied with your stay and the whole family decides not to change their home, when the loan expires, you can get an additional mortgage and replace the simple traditional mortgage with a combination loan with a credit line. Then repay the loan along the way. When the balance is paid off, there is a credit line that can be repaid at any time. It can be regarded as a cash reserve. You will not be afraid of several epidemics. My personal opinion is, The credit line under your home is for emergency use only. Do not withdraw money for any investment. Life is life and investment is investment. After all, eating well and sleeping well are the most important. Some people withdraw money from the credit line of their own homes to invest in stocks and buy investment properties. These people are in a mortgage vegetative state.

When buying an investment house, you don’t need to apply for a combination loan with a limit, because there will be opportunities for additional mortgages in the future, and you can just do it when you increase the mortgage. There are two main reasons: 1. After you buy a credit line, you will not be able to repay much of the principal during the loan contract period, and the available credit limit is not enough to use as a down payment to buy a property; 2. Some banks count unused credit lines as debt, which reduces the number of banks that borrowers can choose from when buying investment properties in the future. When it comes to investing in a house, if you decide you don’t want to mortgage any more, you just want to pay it off. When you increase your cash flow, you can just get a combination loan with a limit.

The third rule of refinancing: refinancing means redoing the loan, which can make up for past regrets. There are two types of mortgage products, those with quotas and those without quotas. Choose the product you need based on your long-term goals. A large balance of mortgage is the most important factor affecting the ability to refinance. If you don’t want to remortgage to invest in a house, just increase the debt of your home as much as you want.

04  Transferring loans between different properties

Moving the debt from your home to an investment property means asking the tenant to help you repay the loan. The interest rate is already low and the repayment is transferred to the tenant. Thinking about it makes me laugh out loud. Doing so is not easy, and often requires a combination of mortgage and credit limits, as well as overcoming tax-saving paranoia.

If the balance of the mortgage is less than 2.5 times the household income, the borrowing capacity will be released. At this time, you can afford to buy an investment house or add a mortgage to an investment house. If the "new money" taken out from a mortgage investment house is used for investment, all the interest on the new loan can be tax deductible. However, if the "new money" is used to accelerate the repayment of the owner's house, the interest on the "new money" portion cannot be tax deductible. For example, if the original loan for an investment house is 300,000, and the new loan amount after the additional mortgage is 450,000, if the 150,000 taken out is used for investment, the 450,000 loan interest on the investment house will be tax deductible. If the 150,000 is used to accelerate the repayment of the home, although the new loan amount is 450,000, only the interest on the 300,000 loan can be used for tax deduction. At this time, the provincial tax controllers backed down. Continuing to accelerate the repayment of owner-occupied mortgages is, firstly, to further improve borrowing capacity, buy more investment properties and save more taxes, and secondly, to transfer the owner-occupied loans to tenants and complete the most important part of retirement - paying off the owner-occupied loans. Only by paying off the mortgage can you retire young retire rich. Not only that, mental relief is more important. Have you ever thought about the difference between buying a house and renting a house? There is hope when buying a house, and one day the mortgage will be paid off; there is no hope when renting a house, and one will help others pay off the mortgage all their lives.

Get rid of the tax-saving paranoia and use the available limit of the investment house to repay the mortgage; instead of buying an RRSP, accumulate the limit, and then buy an RRSP for tax deduction when selling the investment house. The effect is better, and the saved deposit will speed up the repayment of the mortgage. It is all worth it.

To answer a question that has been asked a lot nowadays: The interest rate is locked at a high point and cannot go down. The penalty for defaulting on a fixed interest rate is too high. How to break it? 1. For a loan with credit, withdraw money from the available limit and convert the withdrawal into a new loan. The current new loan interest rate will be applied, and the withdrawal will be used to repay the loan with a high interest rate in advance; 2. Add a mortgage to invest in a house, and the fine can be tax deducted. The new loan will be transferred to another bank to receive a welcome package to reduce losses, and the cash withdrawn will be used to accelerate the repayment of the high-interest loan; 3. All loans are traditional mortgage loans, and there is no credit limit available. Which one will be defaulted on? Loans come with heavy fines. In this case, you can only ask TD Bank to find out whether you can add a credit line to the existing loan based on your income. After withdrawing the credit line with the second mortgage, it can be converted into a loan/installment with the same interest rate as the mortgage loan. However, withdrawals under the credit line with the second mortgage from other banks cannot be converted into a loan/installment.

Conclusion:

I introduced the basic knowledge of mortgage refinancing two years ago in the article "What is Refinance Once?" I hope readers can review it. There was a case in that article about a case where a bank product was abused and the bank repossessed the property without asking questions. Please maintain the minimum respect for banks and bank products. Know what you know and don’t take it for granted.

Those who can apply for additional mortgages must meet two conditions at the same time: 1. Their home ownership and other consumer debts are small enough; 2. Their income is high enough. People who have pushed the stone up the mountain especially love their jobs because they bring them the ability to borrow money. There is no personal loan with a lower interest rate than a mortgage loan. People who work hard, restrain their desire to consume in advance, and pay taxes honestly will not get medals, but banks will reward these low-interest loans for those who strive to be the best. This reward is enough for middle-class families to become rich. Those who are looking for shortcuts, hoping to borrow money without working or filing taxes, please continue to look for it in this mature capitalist country. Those who work hard are going to ride the waves. Those who have income and dare not borrow money are welcome to continue running with me, use their own wealth as a benchmark, and witness the power of real estate investment. The shortcut to the logic and techniques of borrowing money in Canada is to understand the 6-episode lecture "In order to balance our lifetime income we are forced to invest", love life, work hard, pay taxes honestly, and get involved.

Two years ago, some people were worried about others, and what happened to the "smart people" who have continued to increase mortgages to buy houses in recent years. Now I can tell those who are worried that those who have been adding pressure over the years have always been happy.