Bank or Broker for the best mortgage deal?
Written by the The Calgary Mortgages .CA Crew
You’ve been loyal customer to your bank, you have developed a solid relationship with them, they hold all of your RRSP’s and your chequing and savings accounts, they’re going to get you the best deal on you mortgage, right?
SORRY! But this is not always the case.
Unfortunately, your bank only has access to the rates that they have available THAT day. Walking from Bank to Bank with your mortgage file and having each banker try to match or beat rates is not only a huge waste of your time, but really hard on your credit. So – what can you do?
Can using a Mortgage Broker get you a better deal?
When shopping for a mortgage, (especially if it is your first one), seeking those low interest rates and the best terms and conditions can be overwhelming and confusing. Analyzing and evaluating the information and product offerings from each lender could take hours or even days of your time.
Our recommendation is that you put one of our mortgage brokers to work. A good mortgage broker will make sure that you are guided through every step of the mortgage process. They will apply their knowledge to select the best lender and mortgage for your specific situation. They will help you organize and manage all the necessary paperwork and they will handle negotiating and communicating with the lenders on your behalf. Sounds a lot less stressful, doesn’t it?
Why should you work with a mortgage broker?
Mortgage brokers only deal in loans. That’s it, that’s all. They don’t sell RRSP’s or open bank accounts. All they see, all day, everyday, are mortgage transactions. Because of this, they are really experts when it comes to lending.
A great benefit of creating a mortgage file with a mortgage broker is that they pull your credit one time your deal can be sent to multiple different lenders with that same credit bureau. This is easier on your credit rating in the long run.
Mortgage brokers usually have access to a multitude of lenders and if you’re a strong borrower they should be able to shop for the day’s best rates. Between the big banks, monoline lenders and credit unions, there is always a competition for the “lowest rate.”
Alternatively, if your income, down payment or credit situation is outside the lending guidelines of your current bank, a mortgage broker is able to source alternative, outside the box, solutions. Every lender has a different list of guidelines, so if you don’t meet the guidelines at your bank, a broker can help you find a lender with a set of guidelines that work specifically for you.
Sometimes, obtaining a mortgage at your own bank can be the most convenient because your mortgage is attached to your online banking profile. Mortgage brokers can’t always promise that they’ll be able to secure the best mortgage for you at your current lender, so one disadvantage could be carrying another bank card in your wallet or having to log in to another online portal.
It is important to have a complete understanding of the mortgage deal that you have signed up for. Make sure that if you’re dealing with a broker or a banker.
Important questions to ask your bank or mortgage broker.
What are my pre-payment privileges?
What is the payout penalty if I pay the loan early? And how does that penalty compare to other lenders?
Is my mortgage portable?
Can I change from a variable rate to a fixed rate without extra costs to me?
What happens if I miss a mortgage payment?
Overall, your broker or banker should be able to answer all of these questions and make sure that you’re starting your mortgage transaction with all the information required to make the best decisions for your family.
Final Thoughts
Overall, your broker or banker should be able to answer all of these questions and make sure that you’re starting your mortgage transaction with all the information required to make the best decisions for your family.
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