| |
Scenario
Two |
| |
Using the Scotia STEP program to maximize interest savings and increase cash flow
|
| |
 |
Husband and wife, with one child, and currently own their home |
| |
|
Property is valued at $200,000, mortgage balance is $120,000 |
| |
|
Monthly payment is $780, remaining amortization is 20 years |
| |
|
Clients have an unsecured
LOC of $15,000, monthly payment $450 (3% of balance) |
| |
|
Other credit card balances total $5,000, monthly payment of $150 |
| |
|
Total monthly payments are $1,380 per month |
| |
|
Clients
goal : Reduce monthly credit payments in order to increase savings
for retirements and child's education. |
| |
You recommend the following
Scotia STEP product mix. |
| |
|
Client’s existing mortgage remains unchanged, payments are $780 per month. |
| |
|
The ScotiaLine®
is drawn down to pay off the existing LOC and credit cards. |
| |
|
Assuming Prime
Rate2 of 6.00%, monthly ScotiaLine®
payments are $100. |
| |
|
Monthly cashflow has increased by $500!!! |
| |
|
Interest savings are significant because of the lower interest rate of the Scotia STEP program. |
| |
|
Clients return, they are expecting their second child and need to do some renovations to the house. |
| |
|
Mortgage balance has been paid down to $100,000 through regular monthly payments. |
| |
|
Regardless of the current value of the property, the clients have created $20,000 additional equity under the original global limit. |
| |
|
The existing ScotiaLine®
can be increased to $45,000 and the clients can draw $20,000 for the
needed renovation. |
| |
|
Additional options for
the clients: increase amortization on the mortgage component to reduce
monthly payments, lock in any portion of the ScotiaLine® to fix their
monthly obligations, or consider requalifying for a higher Global
Limit to unlock additional equity. |
| |
|
Remember:
The clients will be saving time and money with the Scotia STEP program.
The clients avoid the hassle of re-qualifying and re-registering because the
Scotia STEP program can be re-advanced to the original Global Limit. |
| 2 Prime Rate is the prime
lending rate of The Bank of Nova Scotia as published by Scotiabank
from time to time. |
 |
|
