If you’re looking for a mortgage, you might be wondering whether you should go to a bank or a broker. Both have their pros and cons, but there are some key differences that you should know before you make a decision.
A bank is a financial institution that offers various products and services, including mortgages. A bank can only offer you the mortgage products that they have, which means you have limited options to choose from. A bank will also have its own criteria for qualifying you for a mortgage, which might not suit your situation.
A broker is an independent professional who works with different lenders to find the best mortgage for you. A broker can shop around and compare different rates and features from various lenders, which means you have more options to choose from. A broker will also have access to lenders that specialize in different types of mortgages, such as self-employed, bad credit, or new immigrants.
So, which one is better for you? It depends on your personal preferences and circumstances. Here are some factors to consider:
- Convenience: Brokers are usually more flexible than banks. With a broker, you won’t need to take time off work due to limited “banker’s hours.” Plus, you can do everything with your broker over the phone or the Internet without ever having to meet in person.
- Don’t let your credit score take a hit! Mortgage brokers are the way to go if you want to shop around for lenders without each inquiry counting as a hard hit. Your broker only has to request your credit report once, so your credit score is protected. On the other hand, applying at too many banks can lower your credit score (because of the number of hard hits). So, it’s best to apply only to those you’re serious about using.
- Expertise: Both banks and brokers can have knowledgeable and experienced staff who can help you with your mortgage needs. However, brokers tend to specialize in mortgages and have more in-depth knowledge of the market and the industry. They can also offer you more personalized advice and guidance, as they work for you and not for the lender.
- Flexibility: Both banks and brokers can offer you different types of mortgages, such as fixed or variable, open or closed, short or long term. However, brokers can offer you more flexibility and customization, as they can mix and match different features from different lenders to suit your needs. They can also help you switch lenders or renegotiate your terms if your situation changes.
If you or someone you know is thinking about getting a new mortgage, let’s chat! I can help you find the best mortgage options available.