The Real Estate and Mortgage Institute of Canada Inc. strongly urges all Canadians to use a qualified mortgage broker. In today’s marketplace there are many mortgage lenders, and while you might think that they’re basically all the same, they’re not. You might also believe that they’ll give you the best deal available if you have good credit or better. That’s not necessarily the case either. So why use a mortgage broker? That’s a great question, and here are five great answers.
1. Why use a mortgage broker? Banks are in the business of lending money – at the highest rates they can charge.
Lenders are in the business of lending money. Typically a lender, such as a bank will make you an offer if you have good credit or better. While that offer may appear to be a good one, how do you know if another bank or lender wouldn’t offer you an even better rate? And how do you know if another lender wouldn’t offer you better repayment terms than this current lender?
You don’t. You can’t know this without applying to other lenders. Unless of course, you are using a mortgage broker.
2. Why use a mortgage broker? Mortgage Brokers offer more choice the better your credit – they’re not just for those with poor credit
There is a common misconception, perpetuated by many bankers, that mortgage brokers are only for those with poor credit. In fact, a qualified mortgage broker can actually provide you with more options if you have good credit or better. So it makes sense to talk to a qualified mortgage broker if you can qualify at a bank. In addition, many banks deal with mortgage brokers. They are willing to offer better deals for a broker’s client because the broker is bringing them that client.
3. Why use a mortgage broker? It’s cheaper for a bank to get a client from a broker – therefore the bank can offer a lower rate
Banks get clients in two basic ways. One, they advertise. This costs money and that investment must be recovered. This is done primarily through the interest rate that they charge you, the client. The second way for a bank to get a client is through a mortgage broker. This way they don’t have to pay advertising or marketing costs. The bank therefore does not have to pay for originating, or finding that loan. This gets them a new client at virtually no cost, except for the commission that they pay the broker.
4. Why use a mortgage broker? You don’t pay for this great service
If you have good credit or better, you typically don’t pay the mortgage broker for arranging a fantastic mortgage for you. Why? Because the lender, such as a bank, will pay the broker for originating that loan. You get the best of both worlds: great independent advice…free!
5. Why use a mortgage broker? Loyalty
A mortgage broker’s loyalty is to you. A banker’s loyalty, no matter how wonderful a person that banker is, is to their employer. A mortgage broker will advise you when it’s best to switch banks to ensure that you always have the best rate and product for you. Do you think your banker would ever suggest that you go to another bank because they offer better rates? Of course not. Because their loyalty is to their employer.
There are many other reasons to use a mortgage broker, but these five are by far the top ones. Stop being manipulated into thinking that brokers are not for those with good credit or better, because they are. Now go call a broker and get a better deal – you deserve it!