Canadian Mortgage Advisor
8-8 Strathearn Avenue
Greater Toronto Area , ON , L6T 4L9 Canada
1-416-930-1225

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Helping GTA Homeowners find a mortgage that is right for them
Call Us: 1-416-930-1225

Reasons to consult a Mortgage Broker – It’s Free


Bank or a Mortgage Broker

Bank or a brokerMy clients and friends keep asking me this question. You may be asking yourself the same question from time to time. I am trying to answer this question here. It is not an easy task as there may be some hidden conflict of interest here as I am a mortgage agent myself.
Let us look at the main job of a banker and a mortgage broker.

A Bank

 

A Bank: A bank generally lends you its own money. A bank collects that money in many ways. May be from your deposits or selling shares or selling bonds etc. A bank will earn its profit by charging interest on the loan and by collecting fees.
Some banks will sell your mortgage to some other investor and make a commission from the sale. They do that to mainly make more money from a fixed amount of cash also to invest in stock.

 

A Broker

 

A broker usually has a number of lender details available. A broker will usually negotiate a deal for you from a number of lenders in the present market.

Who gets you the best deal:

 

This is a really difficult question. It depends on what your definition of a best deal is.

  • You may be in a situation where no lender wants to lend you money for less than 20% interest. You are in dire need for money. In that situation a 15% interest may appear as a deal to you.
  • You may be an AAA+ borrower. Your credit is great. You have good down payment. You have a long standing business with you bank. You have a lot of cash in the bank. Then your bank actually may offer you a very good rate. Sometimes a broker may not be able to match that.

 


Bank or a brokerBasically its all relative. Your situation and the state of the financial market at that time defines what is the best rate you can get. A good broker / agent will always advise you in your best interest, even if it means losing your business to a bank.

Comparison Table – Fundamental Differences

Banks Mortgage Broker
Usually each bank only offers few types of mortgages. You get to select from a wide variety of products to best suite your need.
Usually offer you few options in rate. Offers more rate options.
Negotiation is difficult. The broker negotiates for you.
Mostly deals with A+ Customers. Deals with everyone.
Do not pay commission to stuffs or pays a flat commission. Receives commission (finders fee) from banks in most cases.
Would not pay attention to you financial plans or futures. Would offer better future financial advices.
Offers expensive mortgage life insurances. May offer you better insurance solutions.
Offers rate only once most of the time. Keeps checking on rate till the deal closes.
May not be available at your choice of time Usually always available.
One size fits all solutions Various options.
Each time you go to different bank they will pull you credit report separately Checks credit only once. Then goes to all the bank with the credit score ready
Mortgage employees may not be licensed. Licensed mortgage professionals.
Standard service for all clients. More personalized service.

Table R.3 Bank or a Broker

This page is to give you some ideas about how the loan process works. Nothing is exact, it all varies from person to person. I have seen excellent bank personnel who are really devoted to the customers. Unfortunately they are very hard to find. My advice to you would be—shop around with banks and a broker at the same time. Judge who is offering the best deal for you. Also a word of caution—”interest rate is not everything”.

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About Us

Sudip Adhikari.
Agent License #M10001082
Broker Mortgage Diligent -
Head Office -1305 Matheson Blvd East, Mississauga, ON L4W 1R1
FSCO #10252 O.A.C , E&OE

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