Blog | Mortgage Advice in Ontario

Why Choose a Mortgage Broker Over a Bank

August 5, 2019 | Posted by: The Mortgage Captain - Ottawa, Toronto and Ontario Mortgage Brokers

Top Reasons to Choose a Mortgage Broker Over a Bank

1. Better Service A mortgage broker is able to give you the personal attention you deserve and understands that you require service that exceeds your expectations. As a result, a broker will work around your schedule and is not constrained by inconvenient banking hours. A mortgage broker can commute to a location of your preference and can provide online resources where you do not need to leave the comfort of your home to obtain a mortgage. Shopping at several banks can be very time consuming. A mortgage broker can show you the mortgage products of all lenders all in one meeting.
2. Better Rates and Products A mortgage broker has access to a network of over 50 lenders and has incentive to save you money, where a bank has incentive to make money. A mortgage broker works for the you, by giving valuable independent advice.
3. Better Experience A mortgage broker is able to design an in depth mortgage plan that compliments your mortgage goals and find a lender that best fits these goals. This type of service is not offered by banks. A bank generally does not contact you throughout the term of your mortgage to check on your current goals. Did you know that banks most often only send out renewal notices a month before your mortgage renews so that it gives you less opportunity to change your lender. A mortgage broker tends to keep in contact with you throughout your mortgage term to ensure you are getting the best mortgage product based on your goals. A mortgage broker can help you decide on whether it would be best for you to choose a variable rate vs. fixed rate, a shorter-term mortgage vs. a longer term mortgage. Since a mortgage broker provides independent advice and is more knowledgeable in mortgages and has your best interest in mind, it leads to a better mortgage experience.
4. Alternative Lending Banks do not have an alternative lending to due to their strict rules and their goal of putting profits before clients. However, mortgage brokers do have access to lenders that can assist you where banks cannot. If you have had a recent bankruptcy, bad credit, divorce/separation, a mortgage broker is able to help you with short-term mortgage solutions, which in turn will become a building block for a long-term mortgage partnership.
5. Network of Complimenting Professionals A successful mortgage broker will have various professional partnerships which can assist you in obtaining your mortgage and financial goals. These partnerships include: 
   • Financial planners, who can assist you in obtaining a RRSP loan in order to obtain your down payment quicker.
   • Real estate agents, who can assist you in buying or selling your home.
   • Real estate lawyers, who can assist you in closing the buying or selling of your home.
   • Life insurance agents, who can assist you in obtaining a life insurance or disability policy that best fits your needs and goals.
   • Home insurance brokers, who can assist in finding suitable home insurance coverage to protect one of your biggest assets.
6. Lower prepayment penalties The majority of mortgages end up changing before the mortgage term has ended. A mortgage broker takes the mortgage pre-payment penalty into serious consideration before finding you a mortgage. However, a bank keeps their posted mortgage rates artificially high to take advantage of these situations. A mortgage broker does not make any money from pre-payment penalties, where a bank can sometimes make over $10,000 on pre-payment penalties on a modest $200,000 mortgage. 
7. Simplified mortgages Banks tend to be generous when it comes to offering 2nd mortgages on your home. The main reason is not due to banks putting the customer first. Instead banks do this to ensure you don’t change lenders by decreasing your flexibility. Banks won’t tell you to match the term end dates of your 1st  and 2nd mortgages. Instead your 1st and 2nd mortgages will have different term end dates and since penalties are too costly, you often have no choice but to stay with the bank. Once banks know you have no choice, they will offer you less competitive interest rates. A mortgage broker understands what banks try to do to unfairly lock their clients in. As a result, a mortgage broker ensures that you always have mortgage flexibility and as such is in a better negotiating position when they come up for renewal.
8. Mortgage Expertise A mortgage broker specializes in mortgages where often times an officer at a bank is a generalist and does not specialize in mortgages. An officer at the bank has little flexibility in negotiating mortgage rates, which often leads to higher costs for you. Furthermore, a mortgage broker is often a business owner who has incentive of providing quality services. Whereas, an officer at a bank is usually an employee on salary, who will get paid regardless of the quality of service provided.
9. Preserve/Increase Credit Score A mortgage broker is able to preserve your credit score by only checking your credit score once. However, if you shopped from bank to bank, each bank would perform a credit check resulting in a lower credit score. A mortgage broker can work with you by showing you ways on how to improve your credit score. Whereas a bank is only interested in profits and do not want to do business with people with bad credit scores.

About MortgageCaptain.ca We're an innovative online mortgage company providng Ontarians with a fresh alternative to mortgages. We connect personal and commercial borrowers with a network of over 50 lenders including big banks, credit unions and private lenders. Our team of mortgage professionals works with all borrowers, good or bad credit and specializes in helping self-employed individuals, first time homebuyers and new canadian residents find an affordable and convenient mortgage solution. No need to make an appointment at the bank. You can sit back and apply for a mortgage in the comfort of your home. Apply online or contact us today!

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