Mortgage Broker or Bank? A very common question when it’s time to start looking for a mortgage. Your uncle may be in the business and you feel obligated to use him, or maybe your long time friend just got a job at the bank and wants you to use her. It comes down to what you as the consumer feels most comfortable with, but we’re going to lay out a couple key benefits you may find to use a Broker rather than a bank.
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One credit Inquiry:
If you decide to use a bank, you would typically go to your own branch first. What happens if they decline you or don’t offer you what you were expecting or deserve. Then you go to the next bank to see what they can do for you. Well now you’ve gone and done two credit inquiries in a short period of time, which can hurt your score. A broker will pull one credit report and use it when shopping your deal to different lenders.
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Someone working in your corner.
Some banks pay their mortgage professionals based on rate. For example, if the lowest they can offer is 2.54% sometimes they will offer you 2.75% to start as some people will simply sign the paper, as the rate drops so does their commission. Brokers do not get paid based on rate and will negotiate on your behalf. A good broker will always get you the best deal available and do right by you.
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Convenience.
Working late and can’t make it to the bank by 5 pm or even 8 pm on their late nights? No problem. A broker will work around your schedule and usually come to where you are, helping you manage your busy schedule.
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Expertise, experience and connections
A good Mortgage Broker will quarterback the entire process for you, outlining everything step by step. They will manage all parties involved from the Realtor to the lawyer and home inspector. They will schedule all appointments and make all necessary follow ups leaving you with virtually no leg work to do other than sign the paperwork and provide your supporting documents. Which are often not as many as when dealing with a bank.
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Flexible Products and Terms
Often times, clients will ask to be placed with a big name bank as they recognize them and feel safer. In some cases, this can be good. But in a lot of cases, after they realize the terms may be much more strict, like pre-payment privileges for example, many will start favoring other types of lenders. The market has changed over the years and there are now more options than ever, which also means more products and options than ever. A broker can help you find a mortgage that suits your needs. Rate, pre-payment options, portability to name a few. A bank can only offer you their products.
The banks aren’t all bad and certainly have some perks, but there are definitely more benefits when working with a broker. If you feel otherwise or maybe have some ideas to add, feel free to comment. We love hearing from our community!
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Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (877) 335-4486.
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