Mortgage Agent Vs. Bank
When you set out to make your homeownership dreams a reality, one of the first questions you will need to consider regarding your mortgage is whether it is better to use a bank or a mortgage agent? It’s a fair question, given how complex the mortgage application process can be in today’s market. Whether you are buying a home or refinancing, you will need to work through a mortgage application, understand your mortgage options, and finally secure your funds. When seeking assistance with this, you will need to determine who will do a better job of helping you enjoy home ownership based on your personal circumstances.
Banks and brokers are both excellent choices however, to help you see which one suits your needs best, Gary Corriveau has provided the advantages and disadvantages to using a mortgage agent and a bank. Read on to learn more about what makes each one different.
A. Using a Mortgage Agent
A mortgage broker acts as a middleman between you and lenders when you are shopping for a mortgage. Most mortgage brokers work with a variety of lenders, including banks, credit unions, and mortgage lending companies, which allows them to offer you a wider range of choices. If you have excellent credit, less-than-perfect credit, are self-employed, or have any other special circumstances, the flexibility provided by mortgage agents can be beneficial.
Advantages
A mortgage broker is basically a one-stop mortgage solution. Mortgage brokers and agents have the ability to offer the best mortgage solution available in the market.
A mortgage agent is a licensed professional who works for you, the client. They provide independent and objective advice taking into consideration the interest rate, payment privileges, payment penalties, and your goals to determine the right mortgage solution. In addition, mortgage agents are a great option for clients with employment or credit challenges.
Also, mortgage agents have extensive knowledge and experience that encompasses the entire mortgage market. In fact, most Canadians do not realize that mortgage agents must complete a course and pass a provincial licensing exam to work in the industry. Bank employees are exempt from this requirement.
Mortgage agents provide ongoing services by keeping in touch through the years for annual reviews, refinancing, renovation financing, or debt consolidation.
Disadvantages
Mortgage agents typically cannot offer you other credit products like unsecured loans. Also, mortgage agents specialize in mortgages, and they do not provide banking or investment services. In addition, mortgage agents may not have a brick-and-mortar office nearest to your location, so it may be hard to meet with them in person.
B. Using a bank
Getting a mortgage from your bank is a straight-forward process. You complete a mortgage application and meet with a representative to review your available choices. Your bank may have some excellent options for you to consider.
Advantages
A bank provides the opportunity to have all your financial needs overseen by one institution. You may even have a personal, long-term relationship with one of the bank’s financial representatives.
Although banks do not have the same incentive as mortgage agents, they are anxious to provide mortgages to clients because it helps secure a long-term and profitable relationship. Also, it may be satisfying to have a brick-and-mortar building to go to whenever you have questions about your mortgage.
Disadvantages
The difference between banks and mortgage brokers is that banks can only offer their own products, while mortgage brokers can present multiple mortgage options. Independent mortgage brokers are licensed specialists who have access to multiple lenders and mortgage solutions. They essentially negotiate the best terms and conditions based on your specific situation.
Banks, on the other hand, can only offer their own mortgage products. Generally, mortgage rates are not as competitive and mortgage penalties can be very prohibitive.
In addition, the banks are very conservative and often people have difficulty qualifying based on their financial situation.
Which option should you choose?
The banks allow you the option to consolidate your services with one provider. So, if your primary goal is to have all of your financial services with one institution, then you will most likely get a mortgage through your bank. However, the cost for this convenience is very high. It is worth noting that the most popular mortgage term in Canada is the five-year fixed-term mortgage. Unfortunately, most Canadians are not aware of the hidden costs associated with fixed-term mortgages offered by the Big Six Banks until they are forced to break their mortgage.
The right mortgage is a critical factor in determining long-term savings and the value of a professional mortgage broker comes from having someone who objectively works for you and is not limited to mortgage product offerings from one source, like a bank.
In the past, prospective home buyers turned exclusively to their banks for their mortgage needs. Today, you have more options at your disposal with the growing presence of mortgage brokers. Despite the pros and cons listed above, choosing between banks and mortgage brokers really comes down to what makes you the most comfortable and suits your financial circumstances. Buying a house is one of the biggest purchases you will ever make, so be sure that whatever method you choose to secure a mortgage, it is one you trust and can live with in the long term.
If you are looking for a mortgage agent based in London and Windsor, Ontario, then reach out to Gary Corriveau. For most homeowners, their mortgage is the single largest source of personal debt, and I want to ensure that you have peace of mind throughout the mortgage process. Getting the right mortgage does not have to be complicated. I am here to help you make it easy and comfortable as my team is dedicated to looking after all aspects pertaining to your mortgage. My brokerage is a one-stop solution for all of your mortgage needs with access to over fifty lenders, including banks, credit unions, and mortgage companies.
I offer my services to clients across Windsor, LaSalle, Amherstburg, Kingsville, Leamington, Tecumseh, Essex, Lakeshore, Chatham-Kent, London, St.Thomas, Strathroy, Sarnia, Woodstock, Brantford, Stratford, Kitchener, Waterloo, Cambridge, and all over Ontario. To learn more about my mortgage services, please click here, or get in touch with me by clicking here.