RRSP mortgage as a 1st mortgage
Q. Quite often when you talk about RRSP mortgages, you say they are 2nd mortgages. Can an RRSP mortgage be a 1st mortgage?
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A. Yes, an RRSP mortgage can be in 1st, 2nd or 3rd position on the title of the property. We typically place 2nd mortgages on our properties to extract equity from the property and re-use it elsewhere. We are also open to placing 1st mortgages, but it can be more difficult to find $150,000 or more in RRSP funds from a
We do not recommend placing RRSP 3rd mortgages on property unless you are an advanced investor, and both
Just to clarify, the position of a mortgage on title of a property determines the order in which mortgage holders (mortgagees/lenders) are repaid their money. This is important because the first mortgage holder will normally be paid off in full before the second mortgage holder is repaid, and so on. If for some reason there are not enough funds received from the sale of a property, the second or third mortgage holder may not receive
Many people have heard the term ‘first mortgage’ or ‘second mortgage’, and quite often assume the size of
In fact, the only thing that determines the order of a mortgage is the date and time it was registered on the title of the property.
For a detailed, step-by-step system on how to use RRSP mortgages to buy, refinance, and even sell property, attend our RRSP mortgage seminar or purchase our Home Study Course.
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Paul Blacquiere and Joanne Beehler are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy.
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