Bank vs. Broker

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Bank vs. Broker

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Disclaimer: This is obviously a bias post, haha!

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If you remember, decades ago, it was absolutely taboo to work with a mortgage broker. They were typically your last resort and you went to them when everyone else turned you away.

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Fast forward a few years, and people slowly started to realize that mortgage brokers had optionality. They had access to mortgage products and rates to a variety of lenders.

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Fast forward to today, and mortgage brokers are able to offer the same mortgage products as the big banks (i.e. TD), but more importantly, are able to beat the rate offered to you at the branch level.

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Brokers are commonly used for mortgage transactions today, but it’s key to understand the difference between using a bank vs. a broker to facilitate your mortgage transaction. We’ll break it down into three buckets:

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Availability

This is probably one of the most important to me personally. Think about it - purchasing a home is quite possibly one of the largest transactions you’ll complete in your lifetime - wouldn’t you want someone with experience by your side?

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I’ve had a few clients get in touch in the last two weeks alone to discuss affordability during an “offer night”.

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For context, and offer night is a commonly used real estate tactic (as of late) that requires all interested parties to submit an offer to purchase a property on the same night, essentially having all the buyers compete against one another. The goal of an offer night is to drive the price up as much as possible, and in the current market climate, it’s been a successful strategy with the housing supply so low.

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Think of it as a dedicated team, designed to help you win the home of your dreams. My clients, their realtor and I will typically jump on a call to discuss options for an offer and walk through a few scenarios before finalizing their “upper limit” so they can put their best foot forward when submitting an offer.

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Ask yourself this - would your bank be available to jump on a call to talk through options during an offer night?

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Product Selection

When Mo and I purchased our first home, we got our mortgage from RMG. You’ve probably never heard of them, but they’re considered a Monoline lender. A Monoline lender is a bank that specifically focuses on one product, and in this case, RMG focused on only mortgages.

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We gained access to RMG through a broker. It’s important to note most Monoline lenders are only available through a broker.

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When you walk into a bank, let’s say TD, you’re required to submit an application, afterwhich they’ll pull your credit bureau to assess whether they can approve your deal. If you’re not happy with the products they offer you, or you’ve been declined, you can repeat the process by visiting another bank. The problem with this option is it’s not only how time consuming it is, but the fact that each branch will repeatedly check your credit resulting in a potential impact to your score.

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On the broker side, once you submit your application, they pull your credit bureau and then have the ability to shop your deal around to over 120 lenders they have access to. With over 3000+ mortgage products available, you can be sure your broker will find you a product that fits your needs. That includes being able to match, if not beat, rates typically available at the branch level.

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Full Service

When life hits you, you may find it difficult to obtain a mortgage through a major financial institution. That’s because they have strict guidelines for who can qualify for a mortgage directly from them.

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A broker can not only help you repair any prior financial missteps, but they have access to a wider array of mortgage products to increase your likelihood of an approval, fast-tracking your road to credit score recovery.

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It’s best to think of a broker as a knowledgeable best friend. Someone you can call, text, email at a moments notice when you need a question answered. Could you think of your bank in the same light - I think not!

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Finally, it costs you absolutely nothing to use a broker. Never underestimate the benefit of having someone In your corner providing advice that’s in your best interest.

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Want to chat mortgages? Don’t hesitate to reach out!

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