When looking to purchase a property, most people seek out a mortgage. This is a large loan, amortized over a long period to pay for the purchase price of a home, and you make regular instalments which cover principal and interest. All banks and credit unions offer mortgages, as well as other lenders and online financial institutions, and it can be overwhelming to try and find the best fit for your situation.
Fortunately, mortgage brokers are ready to assist you with this biggest investment. Not sure what a mortgage broker is? Why use a mortgage broker instead of a bank? The simple answer is that it is an easier process and one that can secure your mortgage faster. In the end, that is what we all want, right?
Let’s explain why you should use a mortgage broker instead of a bank.
Mortgage brokers are not bank employees
If you walk into a bank seeking a mortgage, they aren’t going to give you a choice between them and the bank across the street. They have their offerings, and you will only apply for a mortgage through them. With a mortgage broker, the field is wide open.
Mortgage brokers are not bank employees. They are independent business owners or work for one and have no ties to any financial institution. Instead, they have access to various lenders and can offer you multiple product lines.
Brokers have relationships with multiple lenders, which helps them negotiate the best rates for their clients and provide comparisons that you can use to find the right financial fit for your situation.
They Are Accredited Professionals
Becoming a mortgage broker involves training and licensing within the province where they conduct business. This includes a course and education program that they must take with a final exam at the end. They are then sponsored by a brokerage firm and often continue their education to stay competitive and updated on their knowledge and current business trends.
The person at the bank is called a mortgage specialist or advisor, and while they are well-versed in selling their company’s products, they are not regulated or accredited like a mortgage broker is. They also wear many hats, including offering investments and opening bank accounts, so their focus is not primarily on mortgages.
It’s Convenient
Going to the bank to apply for a mortgage is daunting. You have to meet them at their branch and go through a lengthy meeting to determine if you meet their lending criteria. There isn’t much room for negotiating rates, and you may need to return to bring additional information and sign documents. This is just for one lender; if you shop around, you must go through the whole process elsewhere.
With a broker, getting together with them according to your schedule is easy. Some work out of an office or are “on the road” and can visit you at home. They have relationships with many traditional and non-traditional lenders, and they do the leg work, so you don’t have to.
Their goal is to find the best mortgage for your situation, and once they get the required information from you, they will approach multiple banks to find the best deal so you don’t have to.
They Provide Tailored Options
Most banks have specific formulas for qualifying for a mortgage. This means you must fit their criteria to be considered as a client.
A mortgage broker works with various lenders, from banks to credit unions to private lenders, allowing people with unique situations a chance to get financing. This may be:
- Imperfect credit
- Fluctuating income
- Self-employment
- No income documents
- No traditional down payment source
Your broker will take down all your information and match it to the best lender for you. This is vital for those who can’t meet their local bank’s stringent requirements.
There Are No Fees
Getting a mortgage through a bank won’t cost you any fees. You are coming to them, and they, in turn, provide financing that you will make payments on, along with a required down payment.
A broker works for you directly and uses their large network of contacts within lending institutions to get the best mortgage they can for you. For this service, you would think there must be a cost because no one works for free. Yes, mortgage brokers get paid, but it is not by you. They get payment from the lending institutions when they bring them clients, and this commission is paid once you sign the mortgage contract.
Not only will you not have to pay any fees for their services, but they can negotiate lower rates for you when getting a mortgage. Their relationships with different lenders allow them to secure discounts passed on to you.
