Mortgage Blog

Pros and Cons of Banks Versus Mortgage Brokers

January 25, 2023 | Posted by: Angela Robinson

Here are some of the differences between banks versus mortgage brokers, their pros and cons, and how to figure out which is best for you.

Disadvantages of Banks

• - Banks only offer their own products, so there is a limited selection that you can choose from.
• - Some banks have a higher threshold for mortgage approval. This means that you may not be approved at a particular bank, and may have to shop around.

Disadvantages of Mortgage Brokers

- Not every lender works with mortgage brokers, so you may still find a better product and rate by shopping around.

- Securing a mortgage through a broker may take longer and may require more paperwork, since you don’t have an existing relationship with them like you may have with a bank. This is especially a concern if you have a tight deadline for buying your home.

Advantages of Banks

• - If you have been working with a particular bank for a long time, you may already trust your bank and be more familiar with it. This can be comforting in a large and important transaction, such as buying a home.
• - If you have a pre-existing relationship with your bank, it may be possible to leverage your relationship to get a better rate or terms.

Advantages of Mortgage Brokers

• - Mortgage brokers compare products and rates from multiple lenders to offer you a wider selection.
• - A mortgage broker may be able to offer you a discounted rate that you would otherwise not be able to acquire on your own.
• - Mortgage brokers are legally obligated to work in your favour, so there is never any question about whether they are on your side.
• - Mortgage brokers can access secondary lenders or “B-Lenders” who offer easier approvals, although sometimes at a slightly higher interest rate.
• - The relationship between an experienced mortgage broker and a lender can help sway the process in your favour.
• - The broker is paid by the lender who gets your mortgage business, so there is no cost to you for this service.

In the end, deciding where to get a mortgage is a decision only you can make. Mortgage brokers can give you several options that you may not find on your own. Still, if you have a good relationship with your bank, it could be better to skip the middleman and go directly through your financial institution. Before deciding, take some time to shop online and compare lenders, which you can then use as leverage if your bank or mortgage broker does not find you as good of a rate. It is always a good idea to get several quotes and use the information to get the best possible deal for your mortgage.

Decided you are looking for a broker? Get in touch with us today at 780 701 3888 or email marc@albertamortgagepros.ca

Full Article: https://blog.remax.ca/pros-and-cons-of-banks-versus-mortgage-brokers/

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