In another thread there was a brief discussion on the difference between going to a bank vs. a broker for your mortgage. I didn't want to hijack that thread but I feel it is an important topic to be discussed so people understand the differences and can make educated financial decisions when purchasing a home.
When you go a bank you are going to deal with what they call a "mortgage specialist" These specialists are not licenced in anyway, they have nor formal education or training in mortgages. These "specialists" could have been selling credit cards yesterday and might be a bank teller tomorrow. Most importantly these "specialists" work for the bank. They have the banks best interests in mind not yours.
When you talk to a specialist at a bank you are going to get ONE option. You get that banks rates, and mortgage options, that's it. Your financial goals might not be in line with what that bank is going to offer you. It's like trying to fit a square peg into a round hole.
So I'm sure you are thinking that you can just go out and shop around yourself for a mortgage from different banks, which of course you could. However not only will it cost you lots of time and leg work but every bank you go to is going to pull your credit bureau which will hurt your credit score.
Mortgage brokers in Alberta are licenced and are required to go through an educational course in order to obtain that licence. Now I don't want to make it sound like they are getting PHD's or anything but there is an educational procees that is required. Additional to obtain your AMP designation continuing education is required every year.
Mortgage brokers have access to a whole bunch of lenders. I have access to about 40 different lenders and some private lenders as well.
Most important thing is that I work for YOU. I don't work for a bank, I don't have an allegiance to any bank. My business is based on happy clients and referrals. It is in my best interest to make sure you are happy with your experience which means getting you the best rate possible as well as getting you the mortgage options that work for you. Because I have access to so many lenders I am abe to do that unlike a bank.
A good broker is going to offer you the best rate available right off the bat. There is no negotiation with them or haggling.
I had a client recently who's mortgage was up for renewal. He contacted me and let me know what is current bank had offered him as a renewal rate. I was able to beat that rate quite easily, when he went back to his bank to let them know, all of a sudden they were able to drop their rate to match. Why wouldn't that bank just offer their best rate to him right off the bat? He just finished a 5 year term with them where he paid them THOUSANDS of dollars in interest. Yet they still tried sucking as much as they possible could from him.
If there is one thing I want anyone reading this to remember is to NEVER EVER sign your renewal notice from your bank. It can save you thousands of dollars by speaking to a broker and finding out the best available rate at their time of renewal. 9 times out of 10 your current lender is going to offer you a higher rate to try and make as much as they can from you. They are hoping you are just going to sign and not shop around. Unfortunately a lot of pople do sign and pay way more than they need to.
Just please use that broker if they offer you a better rate! If your lender comes back and says they will match, why go back to them after they just tried screwing you?
Oh one other important thing to remember about using a broker.......our services are FREE. It doesn't cost you anything.
As always please feel free to fire away with any questions. I am happy to act as a resource on this board to help people make informed decisions on the biggest financial decisions on their lives.
|