Bank Vs Broker

There have been many great matches over the span of our lifetimes: Ali vs. Frazier, Canada vs. USA for the hockey gold medal, and of course, Leonardo DiCaprio vs. The Academy Awards. However, the great match of our financial times is Bank vs. Broker.

Do you stick with the bank that you’ve been with for years or do you jump ship and swim over to the warmer waters of a mortgage broker?

There are numerous advantages to working with a mortgage broker instead of getting a mortgage directly through your bank.

Knowledge

Mortgage brokers work in the field that they do because they’re mortgage obsessed. They know everything about the market and what it has to offer. Banks, for the most part, are knowledgeable only about their own products because that’s what they sell.

Access

Brokers cultivate relationships with a myriad of lenders so that each of their clients gets the perfect mortgage package. Your bank does not have access to any other products except for their own. They can’t provide you with options because they don’t have any. Furthermore, banks have a quota they have to meet. One day they may be pushing variable mortgages because they haven’t sold enough. Another day they could be trying to persuade you to take on a fixed rate mortgage. A broker won’t force you to take a package you don’t want or need in order to fill a quota because they don’t have quotas.

Exclusivity

Due to the extensive relationships that mortgage brokers foster with lenders, they are often privy to exclusive offers. Banks don’t work with lenders because they are a lender. They can’t offer you exclusive products. They can only offer you the same packages that they offer their other clients. Brokers can get special deals that aren’t available on the open market while your bank cannot.

Products

If your credit is below bar or you are looking for a riskier product like a vacation home rental or third mortgage, a broker will go to bat for you. Mortgage brokers have access to lenders who specialize in servicing those with bad credit. They can also help you prove to lenders that you are not a risk and can handle a second or third mortgage without defaulting on your loan. Brokers can negotiate better interest rates for you too, which makes everyone happy.

When you work with a mortgage broker they do all the heavy lifting. You provide them with your financial information and they shop around until they have found the right package for you.

In the end it comes down to the question of whether you want a mortgage from someone who knows the market and wants you to have the best products available, or from your bank? The choice is clear. When you break up with your bank, go easy on them.