04 Aug Bank vs Mortgage Broker
After years of being a student or living in a rented apartment, you are finally ready for the next step in your life: buying a home. But where to start?
Whether you are about to become a first-time homeowner or your current mortgage is up for renewal, it’s wise to shop around. Let’s explore your options and learn more about your two biggest options: should you choose a bank or a mortgage broker? Is there a difference?
Many Canadians still think of banks when looking for a mortgage. However the trends are slowly changing. In their 2015 spring survey, the Canadian Association of Accredited Mortgage Professionals found that “first-time owners consulted an average of 1.2 mortgage professionals and obtained 1.7 mortgage quotes; 61% consulted a mortgage broker and 39% said they obtained their mortgage from the broker.”
As a potential homeowner looking for a mortgage, you would need to make an appointment with each bank you would like to do business with. You will need to fill out an application form at each one, and each will run their own credit check on you. You are responsible for comparing their different products and picking the one that is best for your situation.
Working directly with a bank can be convenient as it’s like one-stop shopping. However, it also means you are limited to their specific mortgage products and rates. The bank’s job is to sell you one of their mortgages, not find you the best deal.
Mortgage through a Mortgage Broker
A mortgage broker can help you get the loan or mortgage that you need. They specialize in loans, so they won’t try to upsell you on other services. A broker’s job is to find the best possible mortgage for their clients. That means low interest rates, with the right flexibility and terms. You don’t need to shop around – a broker does the work for you.
Mortgage brokers can work on first and second mortgages, home equity loans and private mortgages. They can also help homeowners who are facing a power of sales or a foreclosure. Mortgage brokers represent their clients and not the lenders. They are there to negotiate and advocate for you.
When working with a mortgage broker, you don’t pay a fee. Brokers are paid a finder’s fee and/or commission directly from the lender. And since brokers deal in such great volumes, they can get better rates from lenders than can an individual homeowner.
Do your homework before meeting a mortgage broker or bank representative for the first time. By knowing what the current rates are before your appointment, you’ll be able to make an informed decision. Ask lots of questions and make sure you understand the terms of your mortgage before you sign on the dotted line. No one cares more about your money than you do.
Ready to work with us at the Mortgage Broker Store? Call us today at 416-639-0786 or apply for an instant mortgage by completing our online form. We look forward to hearing from you!