How to refinance if not eligible (in Canada)

Question

Hi, I would like to purchase a property to start brrrr-ing by using my home's equity. I won't be eligible to refinance and am looking for suggestions on how I can tap into my equity. I've owned the home for about 2 years and the home appreciated by about 250-300k since purchased. If I am able to find a way to refinance my own home to begin purchasing a brrrr property how will I then continue to be able to refinance those brrrr properties?

Thanks in advance!

Melanie Dupuis · Answer

Depending which lender you are with for your first mortgage, you could always put a second mortgage on it to take out the equity. Or you could cross collateralize, again depending on which lender you are with.

Eric S. · Answer

@Melanie Dupuis ok thanks alot! Good info. I'll have to speak to my bank if they will allow that.

Melanie Dupuis · Answer

@Eric Shin the second mortgage for example...I have 50k to lend and you have at least that amount or more in equity in your house. I get a lawyer, and you get a lawyer. The put on a 2nd charge mortgage behind the 1st one, which I am now holding for you (like the bank). The money I took out the mortgage on, you receive in cash (50k). Now keep in mind, your 1st mortgage holder needs to be aware and ok with this! If they are not and you do it anyways, they can call the mortgage. We always do everything legally, morally, and ethically.

Eric S. · Answer

@Melanie Dupuis thanks for your response. So if I'm not eligible to refinance I would be eligible for a second mortgage? Also, could you please explain a bit further of what cross colaterizing does? Thanks