Bank vs. Mortgage Broker; Home Buyer’s Dilemma

The heat in some of Canada’s housing markets and the new regulations by the Office of the Superintendent of Financial Institutions (OFSI), makes home ownership a little bit challenging for a first time homebuyer. To top it up, he or she has to choose between a big Bank or a mortgage broker for their mortgage needs.

In 2009 alone, many more people opted for representation by a mortgage broker. The figure was at 40%, an increase from 26% in 2003, according to CAAMP (Canadian Association of Accredited Mortgage Professionals).

Who is a Mortgage Broker? He or she acts as a connection between you (as the home buyer), and the potential lenders. They will provide you with assistance during the application process.

If you get a good broker, he or she will match you with a lender who is ideal for your needs. In that, you get to shop around for the best rates. On the other hand, if you choose to go to the bank, you will only have one option for the products they just offer.

If you play hardball, you may be able to get a lower rate than the one posted. A bank may, however, be in a better position to give you advice on your large financial needs. You should keep in mind that saving yourself a point of percentage, could be good in the long term.

What are the Benefits of a Broker?
• Shopping Around
Well, we believe that you want to secure the best deal available for you. A mortgage broker will negotiate and look around for the optimal contract, for your needs. He will strive to present you with the lowest rate, available in the market.

• A ray hope for borrowers with poor credit
Your credit score plays a vital role in whether or not you can access a mortgage product. Every mortgage broker has to stay up to date with the latest mortgage news in the industry. With this vast knowledge, the mortgage broker can advise you on the lenders who would consider your case.

• Exclusive deals
Some of the best deals within your grasp are not in the open market. A mortgage broker can help you find a suitable product for your needs. The will negotiate, on your behalf, for a better interest rate or a lower application fee, where needed.

A mortgage broker has access to lenders that the bank has not, and a bank only has access to itself. They provide you with a one-stop shop for your mortgage options. Choosing a mortgage option and signing your name to it, is a big financial decision. Make the right choice.