A Mortgage Broker works for you, the client, whereas Bank Specialists are employed by the financial institution.
The benefit of using a Mortgage Broker is the fact that they have the ability to offer you mortgage products from a number of financial institutions. Because a Bank Specialists works for the bank, that means that they can usually only offer you their institution’s products. The mortgage broker does not represent any one financial institution; therefore they act as your representative when shopping for a home mortgage.
Mortgage brokers work solely on commission and they do not get paid anything if the loan does not close. It is in their best interest to get you approved and to secure terms that are beneficial and affordable to you. In contrast, your local bank can only make loans strictly according to the terms of what their institution is currently offering. Bank specialist are typically compensated by a combination of salary and commission.
Mortgage broker simply having a larger number of mortgage options available and you may also be able to receive deals on your mortgage that you simply would not be able to get if you were not using a mortgage broker. Many mortgage brokers will be able to use the relationships that they have built with lenders over the years to negotiate better rates and mortgage terms than an individual would be able to find on their own, helping you to save money both on interest rates and other costs that may be associated with your mortgage.
Depending on your Province, Mortgage Brokers must be licensed and are subject to a strict set of requirements. Accredited Mortgage Professionals (AMP) must take continuing education courses in order to maintain their accreditation. Bank specialists are not licensed and require no formal training.
Because Mortgage Brokers don’t work for a specific lender, your assured that you will be given impartial advice. A bank specialist has a limited number of their own institutions products and while it may not be the best mortgage product out there, they will do their best to sell you their institutions mortgage product because if they don’t your going somewhere else.
Mortgage brokers use their knowledge and experience to negotiate the best possible rate and product for you from a number of lenders. When you see a bank specialist, that mortgage negotiating is typically left up to you.
Should you later need to refinance your mortgage , using a mortgage broker can be a major asset here as well. They will be able to compare interest rates and terms for you easily, helping you to find the best deal available on your mortgage refinance so that you can adjust your mortgage as needed. Your mortgage may be with the same bank or mortgage lender that the broker connected you with when the original mortgage was taken out, or they may be able to find you a better deal elsewhere without you having to do all of the legwork of checking all of the lenders that the broker has access to.
So in conclusion, if you have the ability to use the services of a professional Mortgage Broker and have that Mortgage Broker do all your mortgage leg work at no cost, why would you not take advantage of the offer?
P.S. Remember the article i posted that talked about banks that auto renewed 27% of their mortgage renewals at posted rates which means they have two sets of rates to offer you, one for those of you who know better to negotiate a better rate, the other for less savy people who are sold a much higher rate just because they didnt know any better … was the bank going to tell them….maybe if they asked….. another reason to seek out a mortgage brokers advice, have them review your offering from your bank first…