What if my Bank Goes Bankrupt?

Is My Mortgage Still Safe?

 A recent client called me last week questioning whether the mortgage they just received (NOT WITH ONE OF THE CHARTERED BANKS) was "reliable".

Let me dispel this myth, first by saying...THIS IS NOT TRUE.

I hear a lot of myths in my business but this one seems to pop up every time there is instability in the market, particularly when there is bad news coming out of the US and now Europe. While it is often a concern, the reality is mortgage brokerages typically have access to special deals from lenders that are not one of the chartered banks. In fact, many of these other lenders are either companies owned in part or entirely by the major banks, or major banks themselves in other parts of the world. Rest assured, a mortgage broker can still offer you a mortgage with one of the major Canadian banks, but it may not necessarily be the mortgage rate, terms and conditions that is right for you. Remember the fee for using my services are paid by the lenders, not my clients.

I have said it once, and I will say it again. You shouldn't worry about who lends you your mortgage but who owes you.

As long as it is a legitimate mortgage company (which I only deal with) then you should always be loyal to yourself first and take a mortgage that meets your mortgage objectives and will allow you to be "mortgage free" sooner. In uncertain time you should not worry about who you owe money to, but where you have your own money invested. If it was your best friend who lent you money and his life was tragically cut short, what would happen to that debt? Now, what if he owed you money? I think you now get my point.

Sincerely,

Philippe Daigle