TOP 7 REASONS TO AVOID A BANK MORTGAGE
Back in 2010 the Big Banks introduced a new mortgage product called a ‘Collateral
Mortgage’ (CM). Today, Banks no longer offer the traditional ‘standard charge’
mortgage. CMs are dangerous and should be avoided. Here’s why:
1. CMs act as revolving credit giving you global limit access for potential future needs
without the need to pay legal fees. What, no lawyer? Look out it’s a trap.
2. The Collateral Mortgage is registered for more than the value of your property. Hence
it appears you have no equity. Therefore, no other creditor will touch you.
3. CMs secure every unsecured credit item ie) credit cards, loans, lines of credit etc.,
without your knowledge. Banks do not willingly tell clients this!
4. Even if you never miss a mortgage payment, but might be late on a few credit
card payments, the bank has the right to put your mortgage into default and increase
your interest rate.
5. Because CMs give the bank virtual control over your finances and are more difficult
to get out of without huge fees, the bank does not need to be competitive. They can
charge more and they can refuse you more easily. They end up with more profit, you
end of paying more. This is anything but a safe and friendly mortgage.
6. The banks now charge mortgage ‘break’ penalties, which are excessive and
unconscionable. When most people enter into a mortgage, they think they will not
move during the typical 5 year term. But life happens. Job loss, relocation, divorce,
death and the decision to move up or down etc., cause over 40% of borrowers to
break their mortgages. The cost is huge. Instead of paying 3 months’ interest like
before (typically $2,100) you now pay 3-4x more. We have seen some penalties
exceed $20,000. As a result many can’t move, and worse.
7. With every bank mortgage, staff are trained and get bonuses to sell mortgage life
insurance. They don’t ask any questions, nor are they trained to. This is the worst
scam of all. You are asked one very long, ambiguous (not several clear specific)
question(s) about your health history. If you are confused and want to decline
coverage they try to scare you into signing. This is called ‘Post Claim Underwriting’
where approval is automatic and premiums are collected until there is a claim. The
goal is then to deny any and all claims as possible. It really is a form of entrapment.
Beyond Collateral Mortgages, Penalties and bank Insurance the banks purposely
conceal and avoid providing proper disclosure makes getting a bank mortgage today,
very perilous.
We would be happy to sit down with you to share more. Please get informed.
Please watch these CBC MARKETPLACE episodes on YOU TUBE: COLLATERAL
MORTGAGE or COLLATERAL DAMAGE; COLLATERAL MORTGAGES - WHAT YOU
NEED TO KNOW; THE POSTED RATE SCAM about penalties; and ‘IN DENIAL -
MORTGAGE INSURANCE CANADA. They speak for themselves. It goes much deeper.
We are on your side. Please call us for more info.