Five Reasons to Go with a Mortgage Broker Instead of a Bank
If you’re looking for a mortgage or looking to renew an existing mortgage, your first thought might be to go to your bank. But mortgage brokers can offer you a better result and experience than your bank would.
Who Are Mortgage Brokers?
Mortgage brokers are mortgage specialists certified by the Financial Services Commission who are dedicated to getting you the best mortgage they can. Through their connections with different lenders, including some of Canada’s top banks such TD, Scotiabank, and RBC, they work with you and help you shop for a mortgage that works best for your needs.
Here are five reasons why you should go with a mortgage broker instead of a bank:
1. Access to Lower Rates
Unlike your adviser at your bank, mortgage brokers can offer you mortgages from a variety of different lenders. These can include banks, credit unions, and other alternative lenders. Through the magic of competition, this means that you can almost always find a lower rate with your mortgage broker. You can often even find a lower rate with the same bank using a mortgage broker compared to if you went to them directly. Even if you end up with smaller lenders, you can rest assured that you are in good hands: your mortgage broker will only work with established and credible lenders and make sure you understand all the terms of the mortgage. These lower mortgage rates can save you a significant amount of money over the course of your mortgage.
2. Bypass The Stress Test
New rules implemented in January 2019 make it more difficult for borrowers to get or refinance their mortgages. The new mortgage stress test forces lenders to use a much higher interest rate when checking your mortgage affordability. This may have a significant impact on how much you can borrow, and what kind of home you can afford. Only banks are impacted by this stress test, however. Mortgage brokers can help you access the credit unions and alternative lenders that aren’t restricted by the stress test and get you the mortgage you want even if you don’t pass the stress test.
3. Are You’re Self-Employed?
If you are self-employed, banks may be unwilling to give you a mortgage. RBC, for example, requires a Notice of Assessment from the CRA. Other banks have strict conditions as well. Mortgage brokers, on the other hand, are more flexible and will work with you to understand your situation and provide you access to other lenders so you can still get the home you want. So always consider mortgage brokers when seeking a mortgage if you are self-employed.
4. Potential for Buy Downs
Did you know that you can get an even lower rate than what lenders offer? Mortgage brokers can “buy down” the rate of your mortgage, decreasing their commission so that you can get a better rate. This means you can get an even lower rate and save more money over the lifetime of your mortgage.
5. Save Time
Shopping for rates is difficult and takes a lot of time. If you go directly to the banks and try to compare their rates, you might have to book appointments and get re-qualified again and again at each different lender. In contrast, you can get access to even better rates in one go using a mortgage broker. Plus, when it’s time to refinance, you can go back to the same mortgage broker, who already knows you and your financials, and quickly get the lowest rates for your next mortgage term. As they say, time is money, and with mortgage brokers you save both time and money!
Mortgage brokers are the way to go if you need to get or refinance a mortgage. If you’re still unsure, learn more about mortgages and the home buying process with our interactive tools at https://wowa.ca/calculators. Or call our professional mortgage specialist at (647)-370-0353.