Bank Vs. Mortgage Broker: Which Is Better?
When buying a house, there are several methods to finance your purchase, but the most common way is through a mortgage. Mortgages provide financial flexibility as you make only a small payment towards your investment every month for a specified period. With mortgages, it is also easier to acquire the house of your dreams, which makes them so popular today.
When sourcing a mortgage, there are different channels you can pursue. The two most common ones are banks and mortgage brokers. Both these options are readily available to you to source a mortgage, and they each have their own advantages.
However, which is better, banks or brokers?
The stand-off between banks and mortgage brokers has been going on for ages. Mortgage brokers are the middlemen between you and lenders (including banks). In contrast, banks are direct lenders that do not involve third party interactions. Banks also happen to have many branches, are large and reputable, and offer a certain level of comfort. That said, the bank personnel handling your mortgage requirement isn’t necessarily a specialist in mortgages. That is, they cannot advise you about mortgages apart from their own. Similarly, they are continuously on the lookout for more profit and therefore charge higher rates. These rates are also high so they can cover their overheads.
On the other hand, with a mortgage broker, you receive professional services that are affordable and mortgage products with lower rates. Brokers know everything there is to know about mortgages. They have access to several lenders and, in turn, a broad range of mortgage products. They typically do not charge any fees and their connections with lenders allow them to leverage lower rates and exceptional terms for you. They even provide mobile services and flexible schedules, so you receive convenience.
That said, going to a big bank branch may give you comfort. But, that doesn’t necessarily mean you will get the best advice or rate. Brokers can shop for a mortgage with many different lenders and get you better rates. The lenders that they have access to don’t have overhead when funding mortgages and can pass the savings to you.
Mortgage brokers have become so popular today that they currently fund 25% to 30% of consumer residential mortgages and, as an industry, they are trying to grow that number. Once consumers realize what a broker can do, they should become more comfortable using their services over banks.
But right now, we sometimes still lose a deal to a bank even though we offer a better product or rate. This may happen because banks have these clients’ other businesses like RRSP, bank accounts, savings, and investments, making them feel like they should stay with them. Banks also use this as leverage to keep their clients coming to them for all their financial needs.
When it comes to mortgages, both banks and mortgage brokers are valid options. But, using the right mortgage broker can be the best thing you can do as they provide professional advice. This is something that banks rarely do. Mortgage brokers are willing to help you fix your credit, improve your cash flow, and offer you a customized mortgage product. Banks sell only the mortgage products that they offer, which makes them a limited source.
If you’d like to work with a trusted mortgage broker, reach out to Mortgages For Healthcare Workers. We specialize in mortgages for healthcare professionals, and we work around their schedule. We’re even willing to come to your home or work cafeteria to discuss your financial situation and mortgage requirements. Our services are available across Alliston, Ancaster, Barrie, Bolton, Brampton, Caledon, Cambridge, Concord, Guelph, Hamilton, Kingston, Kitchener, London, Maple, Markham, Mississauga, Newmarket, Niagara Falls, Oakville, Orangeville, Ottawa, Pickering, Richmond Hill, St. Catharines, Stouffville, Thornhill, Toronto, Tottenham, Vaughan, Whitby, Woodbridge, Sault Ste. Marie, Greater Toronto Area, and all over Ontario.