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Mortgage Broker News | 05 Dec 2013, 12:00 AM Agree 0
Many of Canada’s big banks offer clients the opportunity to skip payments on their mortgages. While this can work to their advantage, mortgage brokers are not big fans of strategy.
  • Phil McDowell | 05 Dec 2013, 09:25 AM Agree 0
    Before taking a "skip-a-pay", the borrower should confirm the actual rate charged on the Skip. Is it the contract rate, posted rate at time of the advance, or some other rate declared in the credit disclosure statement accompanying the mortgage advance/renewal? It could be higher than the contract compounding rate
  • Chad Eliason | 05 Dec 2013, 09:34 AM Agree 0
    If they use this option, does it still leave them in good standing at time of renewal?
  • Cameron Mackie | 05 Dec 2013, 11:08 AM Agree 0
    @Chad Eliason – Depending on the lender. It all comes down to what shows up on the payout statement.

    I can almost consider this to be another retention tactic with some lenders.

    Recently I had a client come to me, their mortgage was up for renewal. Client informed me they never missed a payment however they neglected to inform me they “skipped” a payment.

    This file went all the way to the solicitors to close only to find out the current lender put the "skipped” payment down as a late payment.

    Due to timing the clients had no choice but to renew with their current lender for a short term.

    As agents and brokers we should all fully understand the fine print and its repercussions. Selling a perk or additional service these days can come back to haunt us if we’re not careful.
  • Bryan Jaskolka | 07 Dec 2013, 04:07 AM Agree 0
    I agree. These "mortgage vacations" do not help homeowners, except maybe for that one month when they don't have to pay. There's too much fine print, too many conditions, and too much space for human error in order for these to be worthwhile, in my opinion.
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