Quoting mortgage broker “Kymberly Ezzard”
- Some banks have introduced a plan to gain greater control over their clients by way of a collateral mortgage pledging your equity to the bank.
- Beware of collateral mortgages and a clause called a “re-advance clause”. Ask your lawyer for a full explanation.
- When the consumer wants to refinance their loan , switch lenders at renewal or place a 2nd mortgage; it could be difficult.