Bank or Broker?
The other night I was at a party and someone asked me,
Why would I use the services of a Mortgage Broker when I can get a mortgage from my bank? I have excellent credit and earn a good living. What is the benefit to me?
Before answering, I thought about my past clients and I asked myself, “Would they have been better off working with their bank?” For the most part, my answer was “no.”
I am very passionate about what I do. Helping clients find a mortgage that is suited to them provides me personal satisfaction and joy – please, no rolling of the eyes. Like most brokers, my clients range from first time home buyers to clients with bruised credit who need a little bit of help getting back on track – all of them with their own experiences, uniqueness, and stories.
There are some fundamental differences between what a bank can offer a client and what a broker can offer a client. However, ultimately, the answer is SERVICE. The person you have assist you with your mortgage should be knowledgeable, approachable, trustworthy and passionate about helping you achieve your goals. They should be able to provide you with insight that you may not have considered before speaking with them. They are able to put your needs ahead of theirs. They appreciate your business and understand that you are doing them a favour and not vice versa. So, if you find someone who is able to offer you all of this, then you should work with them because they will definitely have your best interests at heart. It doesn’t matter if they work for a bank or are a mortgage agent/broker.
The Financial Services Commission of Ontario (FSCO) has developed a Mortgage Checklist to use when shopping for a mortgage. I encourage you to print it off and have it on hand when shopping for your mortgage.Mortgage Checklist | Download
DIFFERENCES BETWEEN BANKS AND MORTGAGE BROKERS
|Limited to in-house products.||Vast number of products and lenders – some available exclusively through the broker channel.|
|Most banks do not offer alternative lending for clients who do not qualify.||Able to place mortgages with alternative lenders and/or private investors, depending on the client’s needs.|
|Bank employees, main focus may not be mortgages.||Specialized – only sells mortgages.|
|Client may have to meet with several banks – each time a new credit report is pulled.||Broker will contact several lenders for the client – only pull one credit report and share with multiple lenders.|
|May be intimidating for clients to work directly with a bank because the bank employee will be making the final decision.||A broker may be able to advise the client prior to submitting their application on how best to position it for the greatest maximization.|
|If a client does not meet the borrowing criteria due to bruised credit or is self-employed, banks may refer clients to mortgage brokers.||In addition to helping employed clients, brokers are able to assist clients who have bruised credit, are self-employed and/or commissioned.|
Have a question or comment? I would love to hear from you. Feel free to send me an email at firstname.lastname@example.org.