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Selecting a Canadian Mortgage Broker or Bank in Canada: Which is Right For You?

Deciding on whether you want a mortgage broker or a bank to handle your needs can seem daunting.  Here, we break it down for you so it's easier to make the right choice.

  • 70% of mortgage consumers use their personal bank to arrange their mortgage simply because they are unaware or unclear about what professional mortgage brokers are, what they do, how they are paid.  More importantly, they are unaware of the benefits.
  • The other 30% of mortgage consumers, especially the younger Internet-savvy generation, have already discovered that mortgage brokers are an excellent source of information that also save them time and money.
  • Recently, mortgage brokers have taken to the airwaves, especially via Don Cherry to the hockey crowd, trying to raise awareness of the mortgage broker option.  Thanks to DLC and to you for doing your part as well!
  • The main reason mortgage brokers continue to gain traction and market share over dealing directly with the bank is that a broker is representing you and your desire to get the best terms possible, not the bank's desire to maximize profits.  Simply put, it eliminates a conflict of interest and it forces the banks to compete!  The second reason is service.
  • And - as Don Cherry says on TV -  "mortgage brokers get you great rates and it doesn't cost you a thing!"

Here is my definition of a mortgage broker...

Mortgage Broker  /'môrgij/ /'broker/:   An independent, licensed mortgage specialist retained by the client to shop the mortgage market (including banks, trust companies and other financial institutions). The mortgage broker will provide independent advice in choosing a mortgage commitment to fit the client’s particular needs. It is a similar service to that of an insurance broker or travel agent in that a professional mortgage broker is a highly trained specialist within a very complex industry. The broker can often obtain mortgage commitments with better terms, options and interest rates than the client can obtain on their own, thereby saving them considerable time and effort, as well as potentially thousands of dollars over the term of a mortgage. The mortgage broker is typically paid a fee by the lender upon the successful funding of a mortgage (no charge to client). If the broker intends to charge you a fee, as would be the case in commercial, agricultural, business and non-bank (private) lending, this must be disclosed up front to the client.

Click here to learn about working with mortgage brokers.

Now that you know what a mortgage broker is, find out if you can get a mortgage by downloading our free ebook:

Can You Get a Mortgage?

 

Topics: Pre-qualification, Mortgages 101, FAQ, Negotiating