Collateral vs Standard Charge Mortgages | Regina Mortgage Broker Explains The Differences

Mortgage broker Kevin Carlson from Regina Saskatchewan explains the differences between collateral and standard charge mortgages.
#mortgagebroker #realestate #collateralmortgage
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Kevin Carlson - Mortgage Broker - FCAA Lic. 315902
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[@lapchoine6600]

So the other 3 big banks only offer the standard mortgage and only TD and Scotiabank offers collateral mortgage?

[@KevinCarlsonMortgages]

Good question. The other big 3 do offer collateral mortgages with multiple borrowing components. TD is the only one that just does collateral.

[@helenaperez2683]

Very good explanation!

[@harshpamnani8530]

That's an amazing explanation. Exactly what I was looking for. Thank you so much.

[@KevinCarlsonMortgages]

Glad it was helpful!

[@YashpalSingh-vq7zd]

Very well explained

[@reelxlive]

Very nice detailed video Please a video about mortgage for a business owner

[@adesojiadewale8463]

Thanks a lot,Kevin!

[@BaldPrairieRealEstate]

Great demo Kevin. Love the video.

[@KevinCarlsonMortgages]

Thanks Matthew.

[@alexandranatalia9689]

Hi Kevin! I’m very new to this as I am pursuing and studying to become a mortgage agent in Toronto. I have a question about collateral mortgage in terms of, when they give you some of that “oil” is there a percentage to that that you have to later on pay off? And that money to be clear is put into let’s say a line of credit that you can use for anything like a visa let’s say? And if they do give you that additional money to use, isn’t that bad for you in terms of you’ll never be done paying anything off cuz you keep receiving more money being lent to you? Sorry if that’s confusing or ridiculous to ask, I’m just really trying to grasp the whole process.

[@KevinCarlsonMortgages]

I am sure that your questions can be answered by whoever is conducting your education.

[@Be.Inspired]

Informative

[@beanbagemporium3635]

wow this video is really well made and simple love it

[@KevinCarlsonMortgages]

Thank you so much!

[@jottaran1731]

Nice explanation

[@huziodaddy]

Can you at any point in time change one standard to a collateral? Are there any restrictions or penalties? Or maybe this can be another video all together. Thank you. Nice video.

[@KevinCarlsonMortgages]

If you want to change your standard mortgage into a collateral that can be done in a refinance but your home must be valued at least 20% more than how much total collateral borrowing you want. If your current standard mortgage is closed and not at the end of the term, yes you will have penalties to pay.

[@karimeldaly1007]

Great illustration for someone who has limited info about mortgages like me! Thanks Kevin. I would like to know from you if there is any risk to get a mortgage from a non-bank lender? I currently have a mortgage offer from one with very good rate and the terms are almost same the banks. However, prepayments incur charges. It is CHMC approved only.

[@KevinCarlsonMortgages]

Non-bank can mean dozens of different lenders. Most are excellent but some have terms that might cost you down the road. Your mortgage broker should be able to point out any pitfalls but read through carefully and make sure you understand all of it.

[@karimeldaly1007]

@@KevinCarlsonMortgages Ok thanks! I heard that First National is good for basic mortgage for first time home buyers but still has pitfalls. What do you think?

[@juancamilorodriguez355]

Thank you!!!

[@part-timephilosopherLol]

Is this not also a form of golden handcuffs so that you cannot access the equity that you’ve put down ... like in the case of putting 20 or 30% down and then they put a collateral mortgage means that you cannot access your equity any other means than through them right?

[@KevinCarlsonMortgages]

Even a standard charge mortgage can prevent you from getting a second mortgage or line of credit with most banks and mortgage lenders

[@part-timephilosopherLol]

@@KevinCarlsonMortgages true yes but it would not tie up your equity in its entirety right? It seems it limits your options to switch at the end of the term, is that correct?

[@yuanth]

Amazing video!!! Are there any fees to switch at renewal on a collateral mortgage?

[@KevinCarlsonMortgages]

Typically yes. Sometimes our mortgage lenders run promotions where they will pay for or subsidize the set up costs. Make sure you are still getting best rate though and the bank or mortgage lender and they are not just paying the setup costs but making it back from you in higher interest.

[@ankur9459]

Question for you Kevin. Could you please explain the prime +10% rate that comes with a collateral mortgage, and it what circumstances would the MLA rate on a 5 year fixed go up?

[@KevinCarlsonMortgages]

You might be referring to a HELOC or secured line of credit. It would not be prime +10%. It could be prime + 1.00% or maybe a bit lower depending on the bank. That refers to the type of rate being a variable or adjustable that will fluctuate with the prime lending rate set by the bank. The banks set that rate based on the Bank of Canada prime lending rate. A fixed rate does not fluctuate with the prime rate. It stays the same for the given term until renewal when you have the opportunity to renegotiate a new mortgage term. Sometimes that means moving to a different mortgage lender to obtain the very best rate possible. A collateral charge is the way the mortgage gets registered rather than how the rates work.

[@erwinbranzuela6957]

hello kevin, in order for you to refinance your mortgage it must be set up as a collateral mortgage?

[@KevinCarlsonMortgages]

Not it doesn't. A refinance for a standard charge mortgage can still be done with a change to the title. A refinance with a collateral mortgage with the same bank normally means that there would not be any need to change the title for a refinance. This is the biggest benefit of a collateral charge mortgage.

[@LearnToThinkFree]

When is it good to use one or the other? In what situation do you want to use collateral charge mortgage?

[@KevinCarlsonMortgages]

A collateral mortgage is good if you know you will want to add more borrowing to your home equity later on.

[@erwinbranzuela6957]

Hi Kevin, must be a dumb question but Which do you prefer personally a standard mortgage or the collateral mortgage? Im just really new in the real estate hoping to buy more income property this year.

[@KevinCarlsonMortgages]

There are no dumb questions on my channel. All are important and help people learn. Collateral vs standard is a personal financial decision. If you like to leverage your home equity as much and often as you can, then a collateral mortgage is ideal. If you prefer to pay your debt off as quickly as possible, then a standard charge is all you need.

[@erwinbranzuela6957]

@@KevinCarlsonMortgages hi Kevin thank you and i really appreciate your reply. so far I have two property and I dont have any idea what type of mortgage do I have on both property.

[@fitfxfitness]

​@@KevinCarlsonMortgagesnice

[@Nevin1343]

Hi Kevin, great video. I understand that a collateral mortgage lets you borrow against the equity in your home, but what is the difference between TD's collateral charge and their FlexLine HELOC? They sound like the essentially the same thing to me.

[@KevinCarlsonMortgages]

Yes they are. All TD mortgages are done as collateral so that you can access additional borrowing later.

[@kurts3779]

So basically your house becomes an ATM with the collateralized mortgage

[@KevinCarlsonMortgages]

Kind of but an ATM let's you access savings and a collateral mortgage let's you access debt.