Mortgage Broker vs. Bank

As you're putting together your team of professionals to assist you in the purchase of your new home, you may be faced with the decision between a Mortgage Broker versus a Bank.

In the past, people primarily looked to their bank to obtain their mortgage. More and more taking the path of a licensed mortgage broker has become popular. 

What is the difference you may ask? 

Let us help explain. 

To put it simply, Banks are limited to the rates and services offered by their bank alone while Mortgage Brokers can shop around to get the best rate from multiple lenders.

Now lets dig a little deeper.

Acting as a freelancing agent, Mortgage Brokers act as a middle man between the borrower and the lender and are paid a commission from the lenders when they bring a qualifying borrower to the lender.

They are independent of any banks and have contacts at several lending institutions which allow them to shop around for the best rates and packages for each individual client.

They have the flexibility to meet you on hours that work best for you and can even come into your home in some situations if that works best for you. 

They will work with you to see what you could be qualified for and will manage your mortgage application every step of the way. 

A Loan Officer can be found at any of the major banks and can present to you the products and rates offered by their particular bank. They are employed by the bank and are paid either through commissions, salary + commissions, or straight salary. 

Traditionally their availability is the same hours the bank is open and you meet with them in their office (bank). 

If you have less than perfect credit, are self employed, just switched professions or have a high debt load, a Mortgage Broker may be your best option.

If you have great credit, steady employment/work history, low debt load and can prove your last 2 years of income tax returns easily if you are self employed a bank may be your best option.

You are not limited to one or the other.

As with everything you will hear differing opinions about each and of course the pros and cons of each must be considered. 

There's no harm in speaking to a Lending Officer at a Bank and a qualified Mortgage Broker to explore all of your options and make an educated decision as to which option works best for your specific situation.

Mortgage Broker versus Bank? 

That's up to you!