Read the small print before you sign.

United States Banks: Amarillo’s National Bank, American Savings Bank California, American Savings Bank Hawaii, AmSouth Bank, Apollo Trust Company, Bank of America, Bank of Elk River, Bank of Galveston, N.A., Bank of Petaluma, Bank of Stockton, Bank of the Commonwealth, Bank One, Bank United, Bankers Trust, BankFirst, Black River Country Bank, Brown Brothers Harriman & Co, Busey Bank, California Credit Union League, California Federal Bank, Capital One Bank, Carlsbad National Bank, Central Bank, Central National Bank, Centura Banks, Chartway Federal Credit Union, Chase Manhattan Corporation, CitiCorp/CitiBank, Citizens Bank (Corpus Christi), Citizens Bank Online, Citizens Federal Bank, City National Bank of Taylor, Colonial Bank, Colorado Credit Union Center, Compass Bank, Country Club Bank of Kansas City, Credit Union Page, Crown Bank, Dime Savings Bank of Williamsburgh, Douglas County Bank & Trust, Enterprise National Bank of Sarasota, Farmers Bank & Trust Co., Federal Reserve Bank of Minneapolis, Federal Reserve Bank of St. Louis, Federal Reserve Bank of Philadelphia, Fifth Third Bank, First American Bank, First Capital Bank, First Citizens Bank, First Commercial Bank, First Farmers & Merchants, First Federal Savings Bank of Indiana, First Federal S&L of Rochester, First Guaranty Bank of Florida, First Hawaiian Bank, First Interstate, First Line Direct, First Michigan Bank, First of America, First Security Bank, First Source Bank, First State Bank of California, First Technology, First Union Corporation, First United, First USA Bank, FloridaFirst Bank, Franklin Bank, Friedman, Billings, Ramsey & Co. Inc., Georgia State Bank, Glacier Bank, Glendale Federal Bank, Grand Bank, Great Midwest Bank, Gulf Coast Bank & Trust Co., Heritage Bank of Commerce, Hudson National Bank, Humboldt Bank, Huntington Bancshares Inc., InterAmerican Development Bank, IWA + Community Credit Union, J.P. Morgan, J.P. Morgan RiskMetrics(tm), Kaw Valley State Bank, Kingfield Bank, La Jolla Bank, Lone Star Bank, Marine National Bank, Mark Twain Bank, Mercantile Bank Lawrence, Metropolitan Bank for Savings, Mellon Bank, Merchants National Bank, Meridian Bank, MidStates Corporate Federal Credit Union, Nantucket Bank, National Bank of Blacksburg, Naval Air Federal Credit Union, Nevada First Holdings, Inc., Northrim Bank, NORWEST Corporation, Ohio Credit Union League, Omni Banks, Owensboro National Bank, Oxford Bank, Pacific Continental Bank, Patelco Credit Union, Patriot National Bank, People’s Bank, Perpetual Savings Bank, Premier Bank, Presidential Savings Bank, Provident Bank, Quincy State Bank, Republic Bank and Trust Company, Salem Five Cents Savings Bank, Savings Bank of Rockville, Seafirst Bank, Six Rivers National Bank, Stanford Federal Credit Union, Star Bank, Sterling Payot Company, Stillwater National Bank’s EBank, Treasury Bank, UMB Bank, University Federal Credit Union, U.S. Bank, USTrust of Boston, Vermont National Bank, Wells Fargo Bank, West Suburban Bank, Wilton Bank, Winona National and Savings Bank.

United States Cities: New York City New York, Los Angeles California, Chicago Illinois, Houston Texas, Phoenix Arizona, Philadelphia Pennsylvania, San Antonio Texas, San Diego California, Dallas Texas ,San Jose California, Detroit Michigan, Jacksonville Florida, Indianapolisa Indiana, San Francisco California, Columbus Ohio, Austin Texas, Memphis Tennessee, Fort Worth Texas, Baltimored Maryland, Charlotte North Carolina, El Paso Texas, Boston Massachusetts, Seattle Washington, Washington District of Columbia, Milwaukee Wisconsin, Denver Colorado, Louisvillea Kentucky, Las Vegas Nevada, Nashvillea Tennessee, Oklahoma City Oklahoma, Portland Oregon, Tucson Arizona, Albuquerque New Mexico, Atlanta Georgia, Long Beach California, Fresno California, Sacramento California, Mesa Arizona, Kansas City Missouri, Cleveland Ohio, Virginia Beachd Virginia, Omaha Nebraska, Miami Florida, Oakland California, Tulsa Oklahoma, Honolulub Hawaii, Minneapolis Minnesota, Colorado Springs Colorado, Arlington Texas, Wichita Kansas, Raleigh North Carolina, St Louisd Missouri, Santa Ana California, Anaheim California, Tampa Florida, Cincinnati Ohio, Pittsburgh Pennsylvania, Bakersfield California, Aurora Colorado, Toledo Ohio, Riverside California, Stockton California, Corpus Christi Texas, Newark New Jersey, Anchorage Alaska, Buffalo New York, St Paul Minnesota, Lexington-Fayette Kentucky, Plano Texas, Fort Wayne Indiana, St Petersburg Florida, Glendale Arizona, Jersey City New Jersey, Lincoln Nebraska, Henderson Nevada, Chandler Arizona, Greensboro North Carolina, Scottsdale Arizona, Baton Rouge Louisiana, Birmingham Alabama, Norfolkd Virginia, Madison Wisconsin, New Orleans Louisiana, Chesapeaked Virginia, Orlando Florida, Garland Texas, Hialeah Florida, Laredo Texas, Chula Vista California, Lubbock Texas, Reno Nevada, Akron Ohio, Durham North Carolina, Rochester New York, Modesto California, Montgomery Alabama, Fremont California, Shreveport Louisiana, Arlingtonc Virginia, Glendale California, San Bernardino California, Boise Idaho, Spokane Washington, Yonkers New York, North Las Vegas Nevada, Winston-Salem North Carolina, Tacoma Washington, Irving Texas, Huntington Beach California, Irvine California, Des Moines Iowa, Grand Rapids Michigan, Richmondd Virginia, Mobile Alabama, Gilbert Arizona, Augustaa Georgia, Columbus Georgia, Fort Lauderdale Florida, Amarillo Texas, Oxnard California, Little Rock Arkansas, Moreno Valley California, Knoxville Tennessee, Salt Lake City Utah, Newport Newsd Virginia, Jackson Mississippi, Worcester Massachusetts, Providence Rhode Island, Ontario California, Brownsville Texas, Rancho Cucamonga California, Aurora Illinois, Fontana California, Tempe Arizona, Huntsville Alabama, Fayetteville North Carolina, Santa Clarita California, Overland Park Kansas, Garden Grove California, Oceanside California, Tallahassee Florida, Vancouver Washington, Dayton Ohio, Chattanooga Tennessee, Rockford Illinois, Pomona California, Santa 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Carrollton Texas, Waco Texas, Simi Valley California, Columbia South Carolina, West Valley Utah, Stamford Connecticut, Bellevue Washingto Flint Michigan, Vallejo California, Springfield Illinois, Evansville Indiana, Inglewood California, Abilene Texas, Olathe Kansas, Lansing Michigan, Lafayette Louisiana, Provo Utah, Visalia California, Ann Arbor Michigan, Clarksville Tennessee, Peoria Illinois, Cary North Carolina, Athensa Georgia, Beaumont Texas, Costa Mesa California, Denton Texas, Manchester New Hampshire, Independence Missouri, Downey California, Thornton Colorado, Gainesville Florida, Santa Clara California, Miramar Florida, Charleston South Carolina, West Covina California, Clearwater Florida, McKinney Texas, Allentown Pennsylvania, Waterbury Connecticut, Roseville California, Westminster Colorado, Norwalk California, South Bend Indiana, Fairfield California, Arvada Colorado, Pompano Beach Florida, Burbank California, San Buenaventura California, Pueblo Colorado, Lowell Massachusetts, Norman Oklahoma, Richmond California, Midland Texas, Erie Pennsylvania, Killeen Texas, Elgin Illinois, Berkeley California, Portsmouthd Virginia, Cambridge Massachusetts, Daly City California, Antioch California, Green Bay Wisconsin, Billings Montana.

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Canadian HELOC Advantages

Most Canadian banks, such as BMO (Bank of Montreal), Royal Bank, TD Canada Trust, and CIBC (Canadian Imperial Bank of Commerce) all base their HELOC rates around prime. The main advantage with a HELOC, as compared to a mortgage, is flexibility. You can borrow from your HELOC at any time, and you pay down as much as you want at any time.

At the time of this writing a conventional HELOC gives you instant access to 80% of the equity in your house or home. You can also have instant access to up to 90% of the appraised value or purchase price (whichever is lower) of your home. Of course you have to qualify.

Servicing Debt on a Canadian HELOC

Most of the above mentioned Canadian banks have similar debt servicing requirements. The average HELOC repayment requirement is 3% or $50 per month – whichever is higher. For example; a home owner in Canada that owes $20,000 on their HELOC must pay the bank approximately $50-$100 per month depending on the interest rate they have.

Canadian Fixed Rate HELOC

For those Canadians who want the security of a fixed rate HELOC, they can lock in at any time. If the prime rate at the Bank of Canada drops significantly it may be wise to lock in.
The BMO (Bank of Montreal), Royal Bank, TD Canada Trust, and CIBC (Canadian Imperial Bank of Commerce) usually have HELOC fixed rate calculators on their web sites. For instant, click here to use the TD Canada Trust fixed rate HELOC calculator.

You also have the option of locking in just a portion of your home HELOC. You can lock in say $10,000 of a $20,000 HELOC at a fixed 1 to 5 year mortgage interest rate with fixed payments.  Clear as mud? It’s really very simple.

Canadian Variable Rate HELOC

With a variable interest rate HELOC you can take advantage of drops in prime, but of course, a HELOC can put you at risk when the prime rises dramatically. Since the dreadful rise in prime during the early to mid 1980s, the Bank of Canada and the United States Federal Reserve rates have luckily been kept down. Inflation has been kept under control for the most part. Therefore, HELOC variable interest rates have been a good option. Where it goes nobody knows, and if I did, I’d be a very wealthy man.

Fixed Rate HELOC vs a Variable Rate HELOC in Canada

Whether you choose to lock in a portion, the full amount, or none of your HELOC is completely up to you, and is a decision that should be based on many different factors. If you have a limited income as an employee, and only a scant few assets, you may want to lock in for 5 years just to be safe. If you’re self-employed, and you don’t have a limited income, you may want to leave the HELOC rate wide open.

For example; A small business owner living in Ontario, Quebec, Alberta, British Columbia (B.C.), Saskatchewan, or Manitoba, who has a HELOC for $60,000 may want to let it ride open with a variable interest rate, as he or she can increase their income anytime they feel like ramping things up. They can take advantage of the current prime rate, and pay allot less interest while they grow their business. If the small business owner(s) can increase their profits at a whim, then they don’t need to fear prime interest rate fluctuations as much. It’s always a concern to some degree, but looking at the last couple of decades, the Bank of Canada and the United States Federal Reserve don’t want to let the rates climb up up and away. Inflation is the enemy of any modern country, measures will always be taken to avoid another runaway inflation problem.

Canadian HELOC Health and Life Insurance

It’s a good idea to purchase HELOC insurance in the case of a “rainy day”. You never know when you might be unable to earn due to some sort of ”problem”. Here is another example from a Canadian bank (name withheld):

“Line of Credit (HELOC) Critical Illness and Life Insurance can pay your balance, up to $300,000, in the event of death, an accident, or covered critical illness. If your balance is greater than 110% of its average for the past 12 months, any benefit payable may be subject to limitations. There are also exclusions that could apply.”

Keep a close eye on the last sentence of this quote. You MUST read all the fine print of your HELOC insurance policy. Make sure you don’t leave your family in the red in case of death or accidental dismemberment.

Advantages of a Canadian HELOC (home equity line of credit)

The major banks in Canada are very competitive, and they’re forced to keep up with each other. This means that they have to make your HELOC as flexible as possible. Below are some bullet points of flexibility that most major Canadian banks offer on the home equity lines of credit:

• the ability to transfer funds from your HELOC using telephone banking or internet banking.
• the ability to make cash withdrawals at any of your bank’s instant teller machines
• the ability to write a HELOC cheque
• the ability to add your HELOC to your personal checking or saving account and access your line of credit funds with your debit card. This means you have a large egg of cash at your fingertips for buying essentials like food, fuel, etc, etc.

Why Canadians are Choosing a HELOC over a Mortgage

• Canadians a choosing a HELOC over a standard mortgage more and more. The reason being that you can pay down your debt without a penalty normally incurred when paying down a large chunk of a mortgage.
• Canadians can use their HELOC for running their small businesses, and the number of small business starts up increase in Canada every year.
• Canadians with a HELOC can enjoy the security of knowing they always have some “rainy-day funds” anytime they’re stuck behind the eight ball.
• Canadians can use their HELOC to buy more real estate for the purpose of flipping houses, or the purpose of having rental properties.

In Conclusion

HELOC options and flexibility will be popular in Canada as long as the prime rate is under control, and reasonably low. If inflation goes on a runaway, and mortgages climb higher, home owners will be forced to have the new 40 year mortgages just make ends meet. I won’t go into my predictions on the World markets, the United States economy, or the Canadian economy. I’m not a financial expert, and I think the term “financial expert” is a redundant term. We’re all living in “the big casino” of life, and we’re all going for the ride.

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These folks understand the savings game implicitly. Although most of us will never be that cheap, we can still learn alot from our family member or neighbor who is burdened with the tag “tight wad”.

I certainly don’t fall into the ranks of the frugal spender, but I’m hoping to be there someday. After all, I come from parents who had to be frugal, knew how to save, knew how to balance needs and wants – and now they are reaping the rewards in a very comfortable retirement. If you have ever read the book, The Millionaire Next Door, or perhaps The Wealthy Barber; those books come very close to describing my parents. The one thing those books and example don’t seem to address is who you marry or who your cohabitant is.

I believe that who you choose to live with, partner with, or share your bed and food with, will make the largest impact on your bank balance. We’ve all seen friends, family members, and foes alike, that collect fat paychecks every month, yet their line of credit is maxed out, their overdrafts are deep, and their credit card interest payments every month would give Old Man Scrooge a massive coronary. 

 *******be right back….gotta have breakfast*******

Ok….bacon and eggs….can’t beat it. So back to our couple above with the massive debt and over-extended life. Many couples like these consist of two people who live for the day, spend all their money, and then continue to spend other peoples money. (the bank’s money) Then again some of these families have children who are spoiled beyond belief, as one, or both, of the parents shower them with every thing they desire.

Sometimes one of the partners will be responsible with money, and the other is a complete train wreck with a credit card, overdraft, or red hot check book. The frugal partner will skrimp and save trying to keep their finances in order, as the other one sneaks off to the mall, motorcycle parts store, golf store, or whatever - and rack up hundreds of more dollars on the Visa or Mastercard. Before you know their personal finances are a complete mess and often the marriage is doomed.

When we all know that main cause of divorce is due to finances, and we know that over 50% of marriages fail, we can draw some basic conclusions. Too many people don’t have the slightest sense of financial responsibility. Now reading this you may think that I’ve been a “tight wad” all my life, and you would be wrong, because I claimed personal bankruptcy 7 years ago. Yep, I had a spouse who spent like crazy, and as soon as I realized we were going to be way over our head in debt, I through in the towel and spent like crazy person as well. Classic. Divorce was inevitable. (thank god) 

After my own experience and than later tracing back the years my parents have been together, I began noticing other couples and how they handle their finances together. The key factor is together. When most people choose a mate, partner, or spouse, they make choices based on warm fuzzy feelings they get from spending time with each other. That’s all swell, but it’s very important to look closely at your possible future partner’s spending habits.

Don’t look so much at their earning habits, because that can change in a heart-beat. Take a good close look at their ability to maintain a balanced bank account. I’m not for a minute suggesting choose a partner based on their ability to handle money – I’m saying that if all other factors such as physical attraction, emotional conviction, love, friendship, and companionship, are all there (and they better be or else you’re better off alone) you need to take a good look at how you handle money together. If one of you is a financial train wreck, don’t do it. Don’t get married, and start bouncing out kids. You’ll regret it.

I’m happy to say that in my case there was a happy ending. My second marriage of 6 happy years has been a team-effort from the get-go and we both keep our eyes on the finances together. It really helps to a have team unit in all respects, whether it be financial or othewise. So when Mom says, “Shop Around”, listen to her.
 
Anyway……gotta run….have to go to the mall and buy 300 scratch and wins

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