WORK WITH A MORTGAGE BROKER
May 12, 2020
Should you work with a mortgage broker or your Bank? Both mortgage brokers and banks can provide a mortgage for your property and both can provide mortgage advice. Before you commit to your next mortgage, take a look at the benefits of working with both Mortgage Brokers and Banks.
* In recent years, brokers have become more popular and according to a survey by the Canadian Mortgage Housing Corporation (CMHC), brokers were used up to 47% of all mortgages in 2019 up from 26% in 2003.
PROS OF A MORTGAGE BROKER:
- Lower Rates: With our partnered lenders we can pass along our volume discounted rates to ur clients.
- Flexible Availability: Brokers can accommodate working around your hours and not confined to regular bank hours. The response times can be faster too.
- Multiple choices: Brokers have connections to many lenders including banks, credit unions and alternative lending sources for a full range to choose from.
- Unbiased Advise: Brokers are not tied to any one lender and can provide opinions from many lenders.
- No Fee: Brokers get paid by the size of the mortgage from our lenders after funding. This means no funding, no commission so we are motivated to to do our best.
PROS OF A BANK:
- Product Tracking: Having your mortgage and checking account on the same web page can be beneficial for some clients.
- Faster Approvals: Your bank will have your current employment, debt and payment histories documented and this can often lead to a quicker approval time.
CONSS OF A MORTGAGE BROKER:
- Not every Lender: There are a few lenders that do not work with the broker channel.
- Client History: If you are a first time broker client, you will need to do a financial history with the broker. This can take up to 30 minutes to complete this.
CONSS OF A BANK:
- Limited Products: Banks can only offer their products and can not provide what other lenders can offer.
- Higher Rates: Due to the banks overhead and salary structure, they will display their posted rates and you will need to negotiate with bank to obtain lower rates. Bank employees get paid more bonuses when selling higher rate products.
- Multiple Credit Checks: If you shop from bank to bank, each bank will require its own credit report. Every credit check will cause your credit score to drop and may affect future approvals.
As you can see, there are benefits of both Mortgage Brokers and the Banks, and there is a place for each in this industry. If you use your bank and are happy using them, that's great. And if you have worked with or plan to work with a mortgage broker in the future, please get in contact to discuss your mortgage and how I can help.
HAVE MORTGAGE QUESTIONS? I AM HERE TO HELP YOU!
Please feel free to contact me with any questions you may have. It would be a pleasure to assist you or any one of your friends or family members!