What is a Luminus Ultimate Mortgage?

Luminus Ultimate Mortgage (LUM) is a collateral mortgage product that allows Luminus to lend you more money as your property value increases without having to refinance your mortgage. LUM allows you to use your home as security for other loans and potentially borrow additional funds. Luminus may register the mortgage charge for an amount more than the initial mortgage loan. This allows you to borrow additional funds without having to register a new charge providing that the total amount owing is no more than the principal amount of the collateral charge.

For example, if you require a mortgage loan for $300,000 to purchase a home, Luminus may register a collateral charge for $350,000, which gives you an additional $50,000 to borrow in the future without having to register a new charge.

How much could Luminus Financial register the charge for?

LUM may be registered for up to the full value of your home or more to allow you to borrow additional funds in the future. Luminus may recommend LUM be registered for a higher amount to provide future borrowing needs.

For example, Luminus could register the charge for 100% or more of the value of your home when you are only borrowing 80% of the home’s value.

However, you only make payments on the actual amount you borrowed. It’s your choice whether LUM is registered for the amount you intend to borrow or for the higher amount. You decide what option best suits your current and future financial plans.

How would I borrow additional funds?

To do so, you must qualify for the additional funds and the collateral charge would need to be registered for a sufficiently higher amount. Some conditions would apply.

What costs would apply if I wanted to switch lenders?

If you wish to switch your LUM to another lender at the end of the term, you will likely pay a fee to discharge your existing mortgage and register a new mortgage with your new lender.

If you wish to switch your LUM mid-term, there may be a prepayment charge. Additionally, if your LUM secures other debts such as car loans, lines of credit, you must repay those debts before the mortgage is discharged.

Should I discharge my Luminus Ultimate Mortgage when it is paid in full?

A collateral mortgage like LUM is generally discharged at your request, unlike traditional mortgages. By not discharging your LUM, you can save on legal fees and registration costs if you need to borrow money in the future. If you think you won’t need to borrow again, ask Luminus to discharge the mortgage.

What are the benefits of a LUM?

  • Flexibility to borrow money against your home equity without the need to register a new charge.
  • Avoid the legal costs associated with refinancing. Serves like a line of credit, with the
  • available balance revolving up or down depending on the usage.

What is the downside of a LUM?

  • If you wish to pay off your mortgage as quickly as possible, the LUM may not be your best option since it can add other debts that you might not necessarily need.
  • You may incur legal fees if you switch to another lender, even if your mortgage is up for renewal.