Mortgage Broker or Bank: Making the Choice Easier
Thinking about buying your first home and aren’t sure what to do or what steps to take? Already own your own place and looking for interesting, relevant information and tips to maintain and enjoy your home? That’s what this blog is all about.
First we explore the most common question I get asked… “Why should I use a Mortgage Broker when I can just go to my bank?”
Mortgage brokers used to be known as the people you go to when you couldn’t get a mortgage for your home anywhere else. Either you had really bad credit or some other issue that prevented the banks from granting you a mortgage. That all changed quite a few years ago. Today you can use a mortgage broker if you have great credit, no credit or even heaven forbid… bad credit.
A mortgage broker is an independent, licensed specialist who has access to multiple banks, lenders and mortgage products. They are not employed by any of the banks or lending companies and therefore offer their clients completely unbiased, professional advice. Since they do not work for any one company they are able to offer the products from a large number of banks, credit unions and other lending institutions.
Getting a mortgage, especially if it is your first home can be quite confusing, complicated and for some people even scary. As a mortgage broker I help my clients negotiate this complicated world of home financing. Before you get the keys to that new home, there is a lot of research and paperwork to do. A good mortgage broker will do all this for you. They will assist you in the application process, from getting pre-qualified right through to the home appraisal. By letting a qualified mortgage broker do most of the work for you, it takes out most of the time, frustration and effort that you would have by doing it yourself.
A good mortgage broker will review your financial situation and discuss with you your current and future plans, and help you choose the right type of mortgage. They will tell you the maximum amount you can consider paying for a house, including what payments you can afford, and what your monthly expenses will look like after adding in all the other home ownership costs. They can also assist you by creating a strategy so you can pay off your mortgage sooner.
In most cases they are able to secure a lower mortgage interest rate than what you could get on your own at a bank. Add to that the flexibility to meet you when and where you want, even after hours and on weekends in most cases.
Did you know that obtaining a mortgage from your bank is like buying a car? If you go in to a bank for a mortgage they will not necessarily be offering their best rate, even if you are an existing customer. Most people don’t know that they need to negotiate their mortgage, just like they do when buying a car. Using a mortgage broker, you don’t have to worry about any of that. They do all the negotiating for you with multiple lenders and have only your best interest in mind.
I read an interesting quote from a recent Bank of Canada study: “… borrowers who use a mortgage Credit union locations broker pay less, on average, than borrowers who negotiate with lenders directly.”
Another advantage to using a mortgage broker is that they only need to pull your credit history once and are then able to submit it to multiple banks and lenders if needed, thus saving you the hit to your credit score by having multiple lenders pulling each time.
A mortgage broker saves you time, energy and money, provides personalized service, with flexible hours. They offer specialized knowledge and will work hard on your behalf and do all the negotiating for you. Oh, and did I forget to mention, this is all done at no cost to you. Your mortgage broker gets paid a commission from the bank or lender that they eventually place your mortgage with.
It is critical you receive independent, unbiased and expert advice throughout the life of your mortgage. Just that alone is the best reason to search out the services of a qualified mortgage broker.
Check out my latest video on the benefits of using a mortgage broker like myself: