When looking for solid trust worthy mortgage advice who do you turn to? Mortgage brokers or bank mortgage advisor'?
Bank Mortgage Advisor
A mortgage advisor at a bank is very much like a mortgage broker in terms of service, availability, flexibility and knowledge, except they work for their respective bank only. A mortgage advisor will meet with you and work with you just like a mortgage broker to see what your best mortgage strategy and options will be in terms of getting a mortgage. They can negotiate with the bank on your behalf to get the best deal on a mortgage. They get paid by the bank, either through commissions, or salary + commission, or just salary.
Mortgage Broker
A mortgage broker is a professional who is a freelancing agent. They go between the lenders and the borrowers (you) and are paid a commission from the lenders for securing a good borrower. They don’t work for any one financial institution. They work for themselves or a team, and have contacts to lots of lenders. They seek out clients interested in borrowing for or against a home and connect them with a lender that will work for them. Some can even go between you and the banks for a mortgage. Many people say their mortgage broker can get a better rate than if they went to the banks themselves. Some people also say that a mortgage broker helped them get approved even though their credit history was poor.
So who to choose? Let’s look at the pros and cons of each.
Bank Mortgage Advisor Pros
- Flexibility: You can see them on your time when and where you want.
- They can offer bank perks such as: discount banking fees, lower interest lending products etc.
- They often pay the appraisal fee.
- Face to face personal meetings.
- Security: Banks likely will not close down.
- Service: Larger network of support services, there is always someone to talk to at your local bank if you have any questions or concern.
Bank Mortgage Advisor Cons
- You have to do the shopping of different lenders.
- Posted rates are often not as low as mortgage broker posted rates.
- If your credit history is poor, banks may not approve you.
Mortgage Broker Pros:
- Flexibility: You can see them on your time when and where you want.
- You often get a very competitive rate.
- They may be able to get you approved with more than one lender.
- If your credit score is poor or bruised, they may find a lender who will work with you.
- You don’t have to negotiate, they will do the negotiating for you.
Mortgage Broker Cons
- The lenders that offer the lowest rates are often located in different provinces with no local branch service.
- The lenders that offer lower rates are often smaller, unknown companies.
- Some lenders pay higher commissions to brokers than other lenders, a broker may place your mortgage with a higher risk lender because of a higher paid commission.
- Additional mortgage broker fees depending on the type of mortgage needed.
- If you have an issue with your broker you have to deal with the broker, there is typically no "higher authority" to make a complaint to.
After reviewing the pros and cons of each it's ultimately your decision and comfort level on who you would like to work with. If you have a good credit history, then shop around at the banks to see what is offered to you. Each bank mortgage advisor is different but most will provide the best rates and solution for you the first time. If your credit history isn’t the best, then going through a mortgage broker might be the best option for you as you have a greater chance of finding a lender.
Take the time to do your research in finding the right advice because it is the biggest financial decision you will make in your life!
