Another headline in the media: "TD Bank client 'devastated' by $17,000 mortgage penalty" was recently published. It is agonizing in this day and age to see another family shocked and "devastated" by what the mortgage penalty is versus what they thought it should be.
The topic of mortgage penalties is a topic on its own. A question to contemplate is: what comes first? Choosing an advisor or a product?
- Do you choose a stock / mutual fund first then find a financial advisor OR a financial advisor first to help you choose an investment product?
- Do you find a house first then choose a real estate agent OR a real estate agent first to help you find a home or investment property?
- Do you choose a mortgage product first then find a mortgage advisor OR a mortgage advisor first to help you choose & explain the fine print (feature & penalties) of various mortgage products?
Consider each trusted professional on your team to be your board of directors. They are to guide you and help you achieve your goals.
Unfortunately, the family had been banking with TD for 20 years and thought they can trust the bank to explain the fine print. Understandably, the bank will sell their own products. And independent advisor would provide options and explain the pros and cons of each option. Until the story got to the media, the bank refused to co-operate.
The next time you embark on buying an investment property, interview 3 real estate agents, 3 mortgage brokers, 3 accountants, 3 real estate lawyers.... to see who you earns your trust to be on your board of directors. With 40,000 real estate agents in the greater Toronto area and per the latest Mortgage Broker Regulators' Council of Canada (MBRCC), 55% of Ontario's mortgage brokers are not full time, do your due diligence!
Choose an advisor first.....then the product.