Mortgage Broker vs Bank – 5 Reasons Why A Broker Is Your Best Option

Finding the right mortgage for you can be a daunting task. While rate is usually the first thing that comes to mind for prospective home buyers, there are several other factors that are essential to saving you money and getting a product that suits your needs and financial goals. This is why it is of the utmost importance to do your research and make a well-informed decision when choosing who and where to get your mortgage from.

To most people, mortgage brokers are a less familiar avenue and are can be associated with negative stereotypes (picture the lazy mortgage broker sitting on the couch in his pjs) when compared to going to your local bank and dealing with the people you know and have established relationships with. But it is essential to know the difference and the benefits of using a professional (and full time!) mortgage broker over a bank.

Let’s start off with the basics; what is a mortgage agent/broker and what do they do exactly? Mortgage brokers are licensed mortgage specialists who have access to multiple lenders, products, mortgage rates and options for financing. They essentially act as your own real estate financial planner by shopping around for you (the borrower) with an assortment of lenders which includes major banks, smaller/B lenders, insurance and trust companies and haver access to private funds as well. They collect all the necessary documents, organize your file and negotiate the best possible deal for your circumstance, all at no cost to you as they typically get paid by the bank/lender. No matter if you’re a first-time home buyer or seasoned real estate investor, here are 5 reasons why you should use a mortgage broker when purchasing property, refinancing or renewing your mortgage:

1. Wider Variety of Options (for free!)

Mortgage brokers typically have access to dozens of lenders which means hundreds of financing options to choose from. With banks, they are limited to the mortgage products supplied by the bank and more often than not they may not be a good fit for you and your financial situation. With a growing number of self-employed or freelance workers, the need for creative financing is at an all-time high. Being sold on a product that you don’t understand or have no knowledge of how it aligns with your goals can be detrimental and result in thousands of dollars of fees if you need to change or break your mortgage term.

Mortgage brokers are often paid by the lender after the mortgage is funded, leaving you with good faith they are not charging absurd fees or prices and getting you the best rate and product.

2. Industry Experts

A good mortgage broker will be an expert in the market, aware of new options, regulations and changes that could both positively and negatively affect their clients. Therefore, they will offer the soundest advice based on market forecasts (i.e., whether to choose a fixed or variable rate) and will be sure to keep you updated in the case you’re looking to renew your mortgage or refinance your home. With constant changes in rules and product options, having a designated professional can make a world of difference.

3. Not approved by the bank? Brokers have access to the B side or private

A poor credit score is detrimental when applying for a mortgage through your bank. It deems you unworthy of accessing credit as it shows you have a poor likelihood of repaying a loan. When working with a mortgage broker you have options to go with smaller lenders that are only accessible through brokers or even receiving a mortgage through a private lender. We all go through tough circumstances in life where paying off a debt in time is unfeasible, therefore lowering our score. Alternative lenders look at the whole picture painted by your mortgage broker and with a higher down-payment or rate, it’s still possible to get the deal done.

4.More Flexible

Have questions/concerns about your mortgage or the progress on getting your approval? Mortgage brokers are often independent and work unconstrained hours compared to the typical 9-5 hours of a loan officer at a bank. They will also have flexibility with meeting times and places making it more convenient for you to have a face to face conversation without having to rearrange your schedule or take off work early.

5. A Worthwhile Relationship With a Trustworthy Professional

When choosing a mortgage professional, they will be your go-to for all things real estate financing. We can renew, refinance and make the most of the equity you have in your property. Building a worthwhile relationship with your broker will be incredibly helpful for years to come and is essential to help you make the best choices with your money and investments over time.

Ever thought about getting into real estate investing? Maybe saving up to buy your kids a house or rental property for additional income? These are all things to consider, even as soon as getting your very first mortgage and your broker will structure a plan that aligns with those goals.

Marina Vander Heyden | Mortgage Agent | Vine Group | marina@vinegroup.ca | (647) 332-9857 | 555 Bloor St. East, Toronto, ON, Canada M4W 1J1

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