If you’re looking for a mortgage on a home or to renew a mortgage, you’ll be asking yourself which is the better option, a bank or a mortgage broker?
The main difference between the two is that the bank represents only the products that their respective institution can offer, while a Mortgage Broker works with multiple lenders, offering a variety of options.
Traditional banks still reign supreme in the realm of mortgages for the majority of homeowners, but brokers are strongly coming into foray. Monica Guido, manager of client relations with Canada Mortgage and Housing Corp says, “It’s higher among first-time buyers. Finding a deal, or the desire to get the best rate, is the key reason people use a broker.”
Since Mortgage Brokers work with many lenders, including major banks, small lenders, insurance and trust companies, and private funds, they often have access to a better rate, offering a much better value than the Big Banks.
“There have been an awful lot of changes in the last 24 months with mortgage regulations and the interest rate environment, and it’s getting more complicated,” says Paul Taylor, the CEO and president of Mortgage Professionals Canada, a national mortgage industry association. “There’s greater need for expert or independent advice, and that’s why more people are coming to mortgage brokers.”
In 2017, 39 per cent of homeowners used a broker to arrange their mortgage, 33 per cent higher than in 2016, according to CMHC.
Here are some advantages of using a Mortgage Broker:
1. With one application, a mortgage broker can shop around on your behalf to multiple lenders ensuring that they get the best deal for you;
2. Mortgage brokers work with lenders that are not accessible to the general public, often times these lenders have more competitive rates and more flexible commitments than the big banks;
3. They have access to a variety of mortgage products that will help their clients qualify for a higher purchase price, which means you be able to purchase a bigger home through a mortgage broker; &
4. They have solutions for people who get turned down from the big banks!
When seeing a Mortgage Broker, they should discuss with you your personal financial and lifestyle situation, whether you plan to stay in a house for a long period of time or are planning to move in a few years (in that case, you may want a mortgage that is portable). The broker should also provide details on various lenders, discuss pros and cons of fixed versus variable rates, and point out any cancellation or pre-payment policies.
If you’re looking into a mortgage, let us help you make this process a whole lot easier. Our Mortgage Brokers at Millennial’s Choice are experts in their fields at getting you the best deal for your situation. Please contact us at firstname.lastname@example.org for more details.