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4 Mar


Posted by: Tracy Price

Imagine you know next to nothing about mortgages. All you know is what mom and dad
told you which is to go to the bank.
So you do and the smiling mortgage officer ask’s you a couple of questions, punches a
few keys and qualifies you for a $350,000 purchase price. You are offered what appears
to be an attractive rate of 2.99% with a discount of 1.70% below the bank’s ‘posted’ rate
of 4.64%. Most people are ‘Good to Go’ and never seek a second opinion.
Rate looks good to you but since you had your eye on a few properties in a somewhat
higher price range so you decide to check with a local mortgage broker.
The broker qualifies you for a purchase to a maximum a $425,000 but because both
incomes were used he/she recommends that you not to go above $385,000 in order to
leave a little ‘wiggle’ room for the unexpected. Along with this good advice the broker
also offers you an even better rate of 2.79%.
But the broker doesn’t stop there. He/she goes on to explain that the banks set a ‘trap’
for you by using ‘posted’ rate in their contract. This enables the bank(s) to charge you a
much higher penalty based on the difference between ‘posted’ rate and ‘contract’ rate if
you break your mortgage before end of term. No one ever thinks they will need to break
the mortgage but life happens and over forty per cent of Canadians do every single
year, and they make the banks rich.
We protect you by dealing with mortgage lenders who have much more reasonable
penalties, which typically are one quarter to one third less because our lenders do not
use ‘posted’ rates, at all. The truth is ‘posted’ rate is fiction since it has nothing to do with
anything, and it’s nothing more than an expensive ‘trap’ that can take a pound of flesh
from you.
Then there is the matter of bank ‘Collateral’ mortgages, another expensive ‘trap’ the
second (even more dangerous) trap. The real crime is that the banks do not inform you
and you never have any chance of reading the ‘fine print’ until it’s too late. Bank
mortgages today are not only unfair but they are also dangerous.
You wouldn’t buy a car without knowing and understanding the features would you? Of
course not. But every time you get a bank mortgage, that is actually what you are doing.
When you deal with a bank, they don’t tell you about the features because they don’t
want you to know about them. With us you are fully informed about the features.
So the next time you need a mortgage remember ‘You can test drive a car, but you can’t
test drive a bank mortgage.’ With us you can take a test drive and we’ll keep you safe!