As I began writing this post about collateral mortgages, I started reading through other articles on the subject (and there are quite a few of them from the past year since TD Bank moved their mortgages from conventional to collateral mortgages). I found a fantastic article on moneyville.ca that really said it better than I ever could. Instead of trying to put together a post myself, I’ll instead simply point you to read the moneyville.ca article: “Beware the pitfalls of collateral mortgages.”
[quote]When you apply for a mortgage, you usually just ask about the term, amount, interest rate and monthly payment. Not many people understand the difference between a conventional mortgage and a collateral mortgage. Yet many banks are now asking borrowers to sign collateral mortgages — and it could result in them being tied to this bank, for life. Continue reading…[/quote]
Once you’ve read the article, come and back here and post in the comments: Now that you know about collateral mortgages, would you ever get into one?
