“According to a 2011 survey by the Canada Mortgage & Housing Corporation, 81 per cent of recent buyers, at some point, will rely on a mortgage professional (either a mortgage lender or mortgage broker) for advice and consultation.”
- Canadian Living Magazine
Do you know the difference between a mortgage broker and a bank mortgage specialist? While the difference may appear subtle on the surface, there are major discrepancies between the two, which could seriously impact your mortgage rate and application process.
The crucial difference between a mortgage broker and a bank mortgage specialist is also the simplest: a mortgage broker works for you, and a bank mortgage specialist works for the bank. This defining characteristic could save you substantial amounts of money and be the difference between getting the right deal for you, or the deal that works best for the bank.
Bank specialists are employed by a company, therefore looking out for the bank’s best interest, and are more concerned with bottom line figures, quarterly reports and turning profit. Mortgage brokers are employed individually by each client, meaning their sole purpose is to make sure clients are happy with the entire mortgage brokering process.
Mortgage brokers are not bound by one bank’s rates or offers. They have contracts with multiple lenders that include The Major Banks, but also alternatives a normal homebuyer might not have access to, or even know exists. With a bank specialist your options are limited, with a mortgage broker the options are plentiful.
The negotiation process for obtaining a mortgage can be complicated and at times confusing. A mortgage broker’s job is to negotiate the best rate for you on your behalf, equipped with information that helps them find the perfect deal suited to your needs. When it comes to a bank mortgage specialist, you are forced to negotiate with the bank, with one lender, and are offered a small window of information.
Concerning the credit check process, mortgage brokers complete one and then use the credit bureau to shop the marketplace on your behalf with all the major banks, trust companies, credit unions and mono-line lenders. If you were to undertake this process on your own, there is the chance your credit could take a hit due to multiple credit checks.
In British Columbia, mortgage brokers are licensed under the provincial government’s Financial Institution Commission, which means they operate under strict rules and regulations. These requirements are set out by the government, not by a private corporation, and are subject to third party oversight and legal ramifications. Each mortgage broker is required to complete training on a regular basis to keep their license and stay current on industry regulations. A bank mortgage specialist requires no licensing, no training or any regulatory updates.
A mortgage is the defining document when it comes to owning a property. When it’s time to navigate the process, it’s important to choose the best option not just for the short term, but down the road too. Mortgage brokers are here for you whenever you need them, and they’re only happy unless you’re satisfied with the process and the end result.