WHY CHOOSE A MORTGAGE BROKER?
The question of why would a consumer choose to use a mortgage broker over a bank has always been asked. What is the difference? Will it cost me for their services? How skilled are mortgage agents in knowing what is best for me?
These are all questions that I am sure you have asked at some point in time when considering using the services of a mortgage agent over your bank when looking for that all-important second opinion.
And here are the answers…
What is the difference between a bank
and a mortgage brokerage? Simply put…. The range of choice a broker can
offer that a bank cannot.
There are generally two ways to
get a mortgage in Canada: From a bank or from a licensed mortgage professional.
· While a
bank only offers the products from their particular institution, licensed
mortgage professionals like myself, send millions of dollars in mortgage
business each year to Canada’s largest banks, credit unions, and trust
companies … offering our clients more choice and access to hundreds of mortgage
products. As a result, clients benefit
from the trust, confidence, and
security of knowing they are getting the best mortgage for their needs.
How does a broker get paid? It works the same as an insurance agent: We are paid a commission by the institution
we arrange a mortgage with.
· I work
for you, not the financial institution and therefore I am paid a "Finders
Fee" by the financial institution after the mortgage has closed. The
“Finders Fee” reimburses me for bringing them creditworthy customers like you.
And since these fees are similar across most lenders, there’s no incentive for
me to favour one lender over another. In very rare instances—if, for example,
you have non-standard credit or a "unique" property—a broker may
charge a fee, but in the vast majority of cases, there’s absolutely no charge
of any kind to you (a fee is charged only for the most challenging credit
solutions, and it’s especially under those circumstances that a mortgage
professional can do for you what your bank cannot). And before asking you to pay any type of fee
the reason for the fee would be fully disclosed and discussed with you.
In a recent article posted on globeandmail.com (link below) Samantha Gale, a former mortgage regulator with B.C.’s Financial Institutions Commission and chief executive officer of the Mortgage Brokers Association of British Columbia said that “mortgage brokers have a fiduciary-like relationship with customers – to recommend a suitable lender with suitable terms. But with banks, a similar fiduciary relationship doesn’t exist because they primarily push their own brand.”
http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/your-bank-mortgage-is-it-fair-and-does-it-suit-your-needs/article8434388/
“Banks are kind of like a mortgage shop,” she says. “And when they pass you off to another lender, and you don’t know who you’re dealing with and why, that’s a consumer risk.” (Banks will require a customer’s consent to work with another lender, but a bank’s true reasons for choosing another lender are not always disclosed.)
In this article it points out that “Some banks refer customers that they can’t service to lenders or brokerages that the bank has a monetary interest with. “They’re not necessarily working for you to get you the best deal,” Ms. Gale says.”
To further understand the differences between banks and mortgage brokerages, please read the article link below that outlines the advantages of using a mortgage professional that works completely for your benefit and advantage…. After all, it’s your money and ultimately your future! Make sure your mortgage is working for you and not the banks.
http://www.thestar.com/life/homes/2012/04/30/pros_and_cons_of_a_mortgage_broker.html
Contact me to discuss your options… can you afford to wait?
www.mortgagesbyandrea.com *
613-968-5151 * andrea005@sympatico.ca
