If you are going to buy a house chances are you are going to need a mortgage. For those that are new to this type of financing, it can be a little confusing. For this reason, most will go to their bank where they feel comfortable arranging finances. But, there is another option and that is by using a mortgage broker. There are some differences and it is worth looking at these to see which is the most appropriate for your specific circumstances.
Provision of Funds
The Bank:
Will provide the actual mortgage upon approval and disburse the funds.
The Mortgage Broker:
These professionals shop around for the mortgage lenders that are offering the best interest rates, based on the criteria that the borrower is able to meet.
The Rates
The Bank:
The Bank does not always have the best rates. They have one mortgage product to offer and the rates are applicable to that.
The Mortgage Broker:
They have a data bank of mortgage lenders that they rely on to do rate comparisons with. They have access to credit unions and various online banks.
What Is A Mortgage Broker?
These are professionals who have to be licensed in order to be to arrange this type of financing. The borrower does not have to pay the mortgage broker. They get paid a commission from the company that they arrange the mortgage with.
Online Mortgage Lenders
In most cases, the bank wants to arrange the mortgages for their clients through face to face meetings. Although there are some banks that may do online arrangements with their established customers. A lot of the mortgage brokers will do everything online.
The Pros and Cons
Mortgage Broker
Pros
The brokers have more options when it comes to tapping into resources that are willing to put up mortgage funds.
It means there is a possibility of getting a better rate.
There may be less chance of being turned down and not getting a mortgage at all.
Cons
The inconvenience of having to shop around for a mortgage broker. For many, it is much easier for them to just schedule an appointment with the Bank.
The brokers may not have additional products to offer.
The Bank
Pros
There are some good pros to going with the bank for your mortgage. If you have been a long-standing customer of theirs then they are very familiar with your financial situation. They may use their knowledge of this to their advantage.
Some individuals feel more secure working with an on land business as opposed to one that is only doing business online
The Bank may have other products that could assist you with your new home ownership.
Cons
There isn’t the advantage of getting a lower interest rate
They may not give any benefit of the doubt if your credit rating isn’t perfect.
The bottom line comes down to it be a personal decision on your part. What is much easier for you is fulfilling your responsibility to the tax department, but filing your taxes as required. If you need any assistance with this I would be happy to help.
