Date Posted: August 3, 2018
Wondering what your options might be? There are some significant differences in the way Mortgage Brokers and Banks handle business that should be important to you.
One of the main differences with a bank is that they offer only products offered by that specific institution whereas a Mortgage Broker works on behalf of several lenders and is paid a fee for the referral. Mortgage Brokers are licensed and their activities are heavily regulated by each province and the Financial Service Commission.
Given that Mortgage Brokers work with a variety of lending institutions including major banks, mono-line lenders, insurance and trust companies, and private funds they often have access to better rates and different products to meet the needs of each individual customer.
“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.”
Some of the differences, as noted in the article, are highlighted below:
-Offers a one-stop shop; clients fill out one application and don’t seek out multiple lenders’ quotes themselves.
-Often are able to get better rates than offered by major banks.
-Are mortgage specialists and are knowledgeable about what different lenders have to offer.
-May be able to arrange a mortgage for those having trouble getting approved by a bank, such as self-employed people and those with poor credit histories.
-Customer may already have a relationship with a bank and its staff.
-Can supply a wider financial view and give information about a range of financial products — but a bank loans officer might not have specialized mortgage knowledge.
-May offer some efficiencies of the approval process since the bank may already know a client’s account balances, credit card history, investments, etc.
-Can provide peace of mind that the institution is large and stable enough to weather periods of financial instability. Banks are required to meet federal underwriting guidelines.