If you are a first time home buyer, it can be confusing whether to opt for a bank offered mortgage or to use a mortgage broker. There are many reasons why you may be tilting towards using a bank rather than a broker. Many new buyers associate a significant risk with a private mortgage and often choose to opt for banks even without checking rates with their local mortgage broker. Although it is understandable, in hindsight, you will realize that there are several reasons why you should use a mortgage broker to secure a favourable mortgage deal.
Bank and loyalty
When it comes to mortgages, it doesn’t matter how long you have been associated with a particular bank or how you have always had a credible credit history or any other factor. Banks have standard mortgage packages. You may not have any visible benefit for your mortgage as a result of being a loyal customer with any bank. At best, all they can do is waive your fees if you know a bank manager personally. But if you are thinking about lower interest rates, lower fees etc., no such benefit is given to borrowers by banks.
It is extremely rare for a bank employee to remain with a particular bank in the same position for a long duration. With regular training and continuous transfer, it is not really useful even if you may have established a friendly relationship with your bank mortgage guy because there is no assurance that they will be in the same place and post for a long time. On the contrary, having a mortgage broker on your side can help since it is their business and they will always be available for you every time you need a mortgage. Loyal customers often enjoy privileges in the form of reduced interest rates with mortgage brokers.
Brokers represent you
Many people do not realize that you can negotiate with your local bank for better rates. Most people simply walk in and agree to whatever rate the bank offers. Remember that a bank will not offer you a low rate nor will they ask you to negotiate for one because it doesn’t serve their interest. On the contrary, a mortgage broker will negotiate a lower rate for you. They can also ask for specific terms and conditions for you and additionally help you to stay clear of high-penalty mortgages. In fact, your mortgage broker can help you get a better rate at your own bank too.
This one is a no brainer. A bank mortgage person only deals with bank customers and prescribe a standard rate for mortgages that have been defined by the bank. However, they lack the experience and expertise needed to help you find a better rate, negotiate your case and bring the best deal for you. Your mortgage broker directs their years of experience and expertise to prepare your case first. They evaluate your employment, assets, risk tolerance, credit history and other parameters to deduce what is the best possible rate that you can have based on your circumstances. Your mortgage broker then proceeds to get you a mortgage at that rate making the deal as favourable as possible for you. Their incentive? A life-long loyal client for mortgages and earnings behind every closed mortgage deal.
If you are thinking about getting a mortgage, speak to Interfinance Mortgage Corporation and understand the merits of involving a licensed, experienced and qualified mortgage broker for your mortgage needs.