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Mortgage Broker News | 22 Aug 2011, 07:09 AM Agree 0
A veteran broker is renewing calls for channel lenders to develop a “forced-savings” mortgage, focused on helping borrowers shift debt at the same time strengthening the industry’s hand.
  • Firstline | 24 Aug 2011, 02:12 AM Agree 0
    I have been doing forced savings mortgages for years with my clients. Most decent lenders will permit this action. Firstline was a pioneer utilizing this technique helping their borrowers pay off a 25 year amortized mortgage in 12 years in many cases. CIBC dismantled this benefit soon after acquiring Firstline. This simple simple strategy helps me show my Clients that I work in their best interest and a bank works in the best interest of their shareholders not their customers.
  • Angela Wong-Liao, Invis Mortgage Agent | 24 Aug 2011, 03:14 AM Agree 0
    As a veteran Mortgage Professional and a former banker for a number of years, I agree forced savings is essential encouraging Canadians saving for the rainy days, however, I do not agree not to pay down the principal of their mortgages. When I was a Bank Branch Manager over 20 years ago, I helped customers to set up fixed savings plan, automatic transfer of a certain portion of their pay from their checking account into a high interest savings account (Tax free savings account in today's market), then prepay their mortgages monthly but leaving a certain portion as emergency savings (saving for the rainy days). This strategy works but only if the customers (participants) have the staying power and decipline. In my opinion, we can advise our clients/customers with the best strategy, it is up to the clients/customers to implement the strategy.
  • Walid Ayoub Mortgage Intelligence | 25 Aug 2011, 01:43 AM Agree 0
    It would be a great idea, especially if we agree with client about limit on amount to be saved say $20K once that is reached then extra payments go to pay down the principal if client takes money away from $20K savings say to buy a car then $ go to saving account rather than extra principla payments until limit is reached. My 2 Cents worth
  • AB Broker | 25 Aug 2011, 07:37 AM Agree 0
    Any of you talking about doing your clients any kind of a favor by putting them into a "forced savings mortgage" are clearly out to lunch. High interest savings accounts are at about 2%/yr while inflation is greater than 3%/yr. If you really care about helping your clients save, broker their mortgage and then promptly refer them to a financial planner who has access to investments that should at the very least, outpace inflation. You might even get some referrals from that financial planner for doing the right thing for the client.
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