Why use a broker?
Before we get into why it’s in your best interest to use a mortgage broker, let’s start off by first debunking a few common myths about mortgage brokers:
1. Mortgage brokers are only for those people who have bad credit.
This is the most common myth about mortgage brokers you may hear. It not only damages mortgage brokers, but more-so you, the client, because mortgage brokers can in a majority of cases get you a better rate than a bank is able to. The reasons why mortgage brokers are linked with those clients that have a lower credit score than average is that we have the resources and expertise to make things work. This is the same expertise that helps our clients with good credit get the best rates available saving time and money.
2. A bank will always get the client the best rate and has my best interest at heart.
Again, we’re not too sure where this one originates, but it is completely false. It simply is not in the banks best interest to give everyone the best rates possible because at the end of the day the bank has to make money and create value for their shareholders. How do the banks make their money? Through interest rates, meaning the higher the interest rate, the better it is for the bank.
Banks will only be able to provide advice on their own products & services and cannot provide independent & balanced advice (you will often hear the disclaimer that they have only given you information on products & services available within the bank).
Mortgage brokers aren’t collecting on interest rates. We’re simply finding you the best possible mortgage that fits your lifestyle. And how do we get paid? Well, the more deals we do between lenders and clients, the more we make. Therefore it’s in our best interest to get everyone the best available mortgage because that would mean more business for us. Unlike banks, we’re on your side.
3. I’m better off staying with my bank because they know me
No, you’re not.
Banks do serve a purpose, however when it comes to getting a mortgage, there are many options available that will be far better then what your bank may be able to offer. Just because your bank has collected a lot of your information over the years, it doesn’t mean that they know you and what products are best for you. What they know is which of THEIR products they can bundle together for you, increasing their rate of return. In the bank world they call this “Share of Wallet”, which means what share of your money they get to keep! Banks understand that people are loyal to them, that shopping other lenders is an inconvenience, so they take advantage of that knowledge by marketing their penalties and fees through other names and confusing programs on you….the unsuspecting customer!
Mortgage brokers offer flexibility, and that’s really the key to using a broker. They can show you product by product the differences in the benefits and features. Not only do they have the ability to find the best rate, but can also help you understand the penalties and any hidden clauses that may cost you more money down the road, particularly if you choose to pay your mortgage off early. A mortgage broker is here to look after your best interests and not the interest of those that are lending you the money.
Now that we’ve debunked a few of the common myths about mortgage brokers, let’s get into why it is in your best interest to use a mortgage broker.
You can’t beat a mortgage broker
As shown with just a couple of myths there are a lot of misconceptions about mortgage brokers.
But honestly, all you’re really wondering is…… what is the best way to go about getting a mortgage? Not what are the differences between banks and mortgage brokers! And that’s understandable because frankly, when it comes to getting a mortgage in Canada, the banks would rather you didn’t know the difference either.
As in all industries, there’s the good and the not-so-good. There are some great mortgage brokers, but not all. And there are some great bankers, but what they can offer is limited.
Mortgage brokers on the other hand can offer you a far wider range of mortgages, a mortgage that will be better suited to you.
Visdom Mortgage Solutions will take it one step further; we’ll tailor the mortgage to you and not you to the mortgage. When entrusting us with your mortgage search you can trust you are getting the mortgage that is right for you and that will give you peace of mind.
Your bank’s mortgage advisers are not mortgage brokers, they simply do not have the knowledge base that a mortgage broker offers.
The big six banks really have nothing at risk. The person you deal with at the bank is a salaried employee. Now they may get a bonus for selling you their lender’s product, but that’s the point. The bonus is for selling you their product, not finding the best option for you.
Do you think that if a different lender has something more suited for your needs, that the lender you’re dealing with will recommend you go there? They’re not concerned with educating you on the terms and conditions, how the seemingly great rate you might be getting will more than be offset by punishing penalties should you want to sell your house or move your mortgage. They want you to either keep your mortgage with them, or pay large if you end it early or transfer your mortgage.
Now whether you’re a first time homebuyer, self-employed, in a divorce or separation situation, a mortgage transfer, a mortgage refinance, a mortgage renewal, or debt consolidation, when dealing with a mortgage broker a vast majority of clients end the process in a much better place than where they began. The stress, uncertainty and misconceptions are gone, and you’ll leave reassured, educated and more empowered than before.
When dealing with a Visdom mortgage professional we will help you understand all aspects of the mortgage, including the fine print, what penalties there may be if any, and how you can pay off your mortgage earlier if you choose. The way we look at it is…. we’re in this together, what’s good for you is good for us.
How about a Mortgage renewal?
Now there are good bankers out there, even some who may take an interest in your goals and circumstances. But in the end, they can only offer their institutions products. And at renewal time, they’re banking on the fact that you’re likely to continue with them, rather than shopping around.
At renewal time, your lender will try to circumvent your mortgage broker. They’ll send you notices imploring you to renew with them directly. But remember, at renewal time choose the broker!
Circumstances and goals may have changed since your last mortgage approval. So do the products available out in the vast mortgage world. What worked for you on signing day back then may not be your best option now. And it’s our job to find which products work best for you in your current situation.
At Visdom Mortgage Solutions, we have access to all lenders across Canada. We know the ins and outs of the industry, where to find the kind of mortgage and financing options that suit your goals and needs, and how to interpret the fine print to keep you ahead of the game.
Remember, the relationship with a mortgage broker is ALWAYS better than one with a lender!