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Why You Should Hire a Mortgage Broker Instead of a Bank?

Purchasing a home can be a complex, time-consuming, and stressful process. This is especially true for first-time homebuyers, who may possess very little knowledge on how to find the home most appropriate for them, and more importantly, how to obtain a mortgage best suited to their economic profile and lifestyle.

For most prospective homebuyers, the obvious place to seek financing is from their bank. However, there are other options available with the help and expertise of mortgage brokers. Independent mortgage brokers are licensed professionals who work on behalf of home buyers, helping them negotiate the lowest interest rate and securing a mortgage product that best meets their needs.

Here are some reasons why should consider choosing to work with a mortgage broker instead of a bank:

Offers access to the entire mortgage market

A mortgage broker has access to virtually the entire mortgage market. A well-experienced broker can leverage his knowledge and network to examine what’s available and obtain the mortgage that is ideal for you.

In addition to traditional banks and credit unions, a mortgage broker also has access to lenders that are not easily found on the open market and remain almost invisible to the average homebuyer. These include the monoline lenders, which are financial institutions that specialize in mortgages only.

Acts in your best interest

A mortgage broker has a fiduciary duty to obtain the best mortgage possible for you. Unlike a financial representative at a bank, who is paid to sell only the bank’s products, the mortgage broker acts independently and can provide impartial advice on selecting the financial institution that is best suited to arranging your mortgage. 

In most cases, a mortgage broker receives a fee from the financial institution that finances your mortgage, so you don’t need to compensate them in any way. 

Has the expertise to find the best deal

A mortgage broker has a working knowledge of all the mortgage products available. They can easily find a lender with a mortgage product that caters to your individual circumstance, including those who specialize in dealing with consumers with adverse credit scores.

There are many aspects of a mortgage to consider, such as fixed vs variable rates, prepayments, portability, term length, amortization schedule, etc. A mortgage broker will present you the options at your disposal in a clear and cogent manner, enabling you to gain a solid understanding of the different types of mortgages available to you.

Aids with the preparation of paperwork

Paperwork for a major purchase like a home can be a daunting task. A mortgage broker can provide you with assistance in the mortgage application process, ensuring that you have filled out each and every single form correctly.

Saves you time and money

A mortgage broker will do all the legwork for you by contacting various financial institutions to find the most advantageous mortgage deal. They are offered loans on a wholesale basis from lenders, which typically results in lower mortgage costs.

A mortgage broker can also refer you to other professionals that you may need to consult with, such as property appraisers and real estate lawyers.

Establish a long-term relationship

Finally, you will have an established relationship with your mortgage broker. This is an important one as rates and rules do change quite a bit in the mortgage industry and you will always have your mortgage broker to contact for advice. Most mortgage brokers are in this career and will be for many years to come and this may not be as common at the big bank, especially at a bank branch. There may be higher turnover and the next time you need help you may not be dealing with the same person, which can sometimes mean more documents to give and having to reiterate your financial situation again and again. 

While it’s perfectly acceptable to acquire a mortgage through your bank, you should consider the benefits of leveraging the expertise of a mortgage broker. A mortgage will likely be the largest loan you’ll take on during your life, so you definitely don’t want to sign on the dotted line without knowing exactly what you’re getting into. A qualified mortgage broker can guide you in navigating the mortgage market to secure the deal that will save you money, giving you peace of mind to enjoy your new home, instead of worrying about your payments.

 

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Email: sarah.penney@ratefair.ca

Call: 780-405-5449