An article in the Globe and Mail reports that TD Bank is making improvements upon its current mortgage program, so that home owners will have an easier time tapping into their equity, at the cost of the ease to switching mortgage lenders. There are many positives and a couple of negatives to this new plan.
In order to be able to allow for quick and easy access to money they are switching more to a collateral-charge mortgage. “The bank is encouraging employees to approve customers at 125 per cent of a home’s actual value under certain circumstances, so the homeowner can easily borrow more money if their property increases in value.”
The Positives:
If you are content with TD Bank as a mortgage lender, then no need to worry. It will now be easier to obtain the equity tied up in your house. This means that the mortgage brokers will work with you access that money in a quick and hassle free manner due to the collateral-charge mortgage.
The Negatives:
If TD Bank is not a company you want to deal with, or if issues arise, then you are sweet out of luck because you cannot break that contract. It could also make it more difficult to get the best rates possible. If an independent mortgage broker is able to offer you a better mortgage rate down the road, then you would not be able to accept it.
“The move has sparked anger among the country’s independent mortgage brokers, who see the change as a direct shot at an industry that has been gaining market share from the big banks by competing fiercely on mortgage rates.”
