Question for my readers.
My parents recently went to the bank to open a savings account. The associate who assisted my parents asked them if they had a mortgage, and my parents said no. He then asked if they had a home equity line of credit, to which my parents also said no. He then asked if they would like to open a line of credit with them, to prevent a second mortgage to be taken out under my parents’ property by someone else.
My parents declined, but when they told me this, it really bugged me.
These are my thoughts:
- The bank is not making (as much) money off my parents since they don’t have debt (no mortgage, no line of credit, no vehicle financing, nada)
- The bank is using a scare tactic to get my parents to take out money so they can make money off the interest
- What kind of a bank allows someone other than the owners take out a mortgage on a property they do not own? Don’t they require proof of ownership?
- Even when someone signs up for a credit card they need to provide proof of employment – how is this any different than a mortgage (or second mortgage) and proof of ownership?
Readers, does what this associate say have any merit? Or is he just trying to make a sale by a (pathetic) scare tactic? Have you had any experience with this?
Thanks for your help.
Update: I’ve had readers question which bank I am referring to. I am in Canada and the bank is TD Canada Trust.