Quote:
Originally Posted by albertGQ
There is a mortgage broker on CP that raves about the advantages of going with a broker over a bank's mortgage specialists.
Maybe you can provide a rebuttal to the CP community as to the advantages of going with a bank's mortgage specialist over a broker who has access to dozens of different lenders.
Thanks!
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Edit: Welcome Kristi! (thanks for reminding me Trout)
Yeah - this thread might be asking for trouble.
My thoughts:
Against banks: the banks will never offer you their best rate off the bat whereas a broker will because they're competing against said banks.
Against broker: some brokers will have a bias to switch clients at renewal or out of their current lender mid term for another lender as then they get a commission. Granted the rates are usually lower so there's double incentive.
A good broker will most of the time get you a rate better than what the bank offers you off the bat.
The biggest thing is renewal. I just dealt with a client whose bank sent the renewal letter out at 4.35%. Pretty much stated "4.35% is our best rate, x.xx% below our posted rate". Client came to me and I have found them at least 3.29%. No legal, no appraisal.
Some banks are better/worse than others. Right now in my opinion of the big banks Scotia is the best lender. Compared to RBC, BMO, TD etc. and that's because they want to be so they're pushing hard with decent rates compared to the other 3 (less that 2.99% sale that ended awhile ago).
Now the banks don't do this because they're bad people. They just do it because most people say "okay" and the bank gets a tidy little profit. The brokers don't always help you because they're all nice people and the bank people aren't. The brokers just want to get paid and often that works in the best interest of the client.
The banks will tout that they're there to take care of you throughout the whole process and during your mortgage. A good broker will do the same. The banks will offer you additional products, accounts and investment advising services. They'd do that for anyone, has nothing to do with your mortgage. Additionally (and this is just from my experience, I'm sure there's some good sales people out there) the average bank employee offering investment advise is completely out to lunch. They're just peddling mutual funds or GIC's that their bank sells. But that's their job and what they're paid for. Nothing wrong with it, just isn't all it's cracked up to be.
Disclaimer: I work both sides of these types of transactions - so I think I'm generally unbiased.
I've sent quite a few borrowers back to their bank for an early renewal to blend their rate down when I could just have easily pushed them to a new lender, for a slightly lower rate that would have been a wash or slightly worse after their out of pocket switch expense. Not all brokers would do that. Additionally I've shown clients the difference between a smaller mortgage and shown them the paydown on different amortizations and loan amounts vs. the most cash and longest amortization that I've seen both brokers and bankers do, thus giving the banker the biggest loan/credit and the broker the biggest commission. Just because at 30 year amortization and today's current rates you can just squeeze by, doesn't mean you should. That said - for some people they should/can.
My advice would be check with your bank and check with a broker. But once you've put the broker to work don't keep running back and forth until you've squeezed the last bit of rate out of the bank until they're the same and go with the bank. You're just wasting someones time who isn't getting paid for doing the work. Make them do the work - but reward them in the end if they do a good job.