Many homebuyers in the Okanagan do not know whether to call a bank or a Kelowna mortgage broker when starting their mortgage shopping. Many homebuyers or homeowners believe, mistakenly it turns out; they will find a better deal at a bank. In fact, the opposite is usually true.
Here are six great reasons why borrowers and homeowners should avoid a national bank, a community bank, or a credit union when applying for a home mortgage, refinancing, or renewing their mortgage and what they should look for when choosing the right mortgage broker for them.
How will you be treated when you shop at a bank? Think back to the last time you called a bank’s customer service department. Remember how they put you on hold and transferred you around? If that is how they treat their existing customers, how will they will treat a prospect? You will be assigned a number and from that moment on, the bank’s mortgage staff will know you by that number.
A licensed mortgage broker who works for you offers personalized, one-on-one service. Ideally, they will be very communicative and proactive, anticipating requests for documentation and other conditions. Mortgage Brokers are paid by the lenders that they place the mortgage with and do not get paid until they close a loan. As a result, they have a great incentive to fight to get your mortgage loan closed. The ideal mortgage broker will be a very friendly, positive person who will keep you constantly updated as to the status of your loan application.
Even if you have great credit, steady employment, satisfactory income, low LTV, and an acceptable property value, you will be asked to provide many documents before underwriters approve funding.
Knowing what the banks will ask for in advance is one of the big bonuses of using the services of an experienced mortgage broker. Anticipating a lender’s loan conditions can save hours of frustration. One of the most important things a good mortgage broker can do is assemble a comprehensive document package from the borrower before submitting the loan to a lender. When the underwriter gets a complete package, it eliminates time wasted going back and forth as the underwriter demands documents from the borrower, who must respond with the documents or risk losing the loan.
Great mortgage brokers know how to overcome lender obstacles creatively without losing their cool. Underwriters often respond to loan packages with conditions that defy reason and common sense. When nonsensical conditions are passed to borrowers without explanation, as is often the case in big banks, borrowers become confused and frustrated and often respond with documents the underwriter did not ask for.
Great mortgage brokers are not rattled by strange condition requests and give careful attention to the request before planning a precise response to clear the condition. This may mean helping a borrower to write a letter of explanation, or calling a credit card company with the borrower to get an item cleared from a credit report. A great mortgage broker goes the extra mile for his client. You have your own personal advocate working strictly on your behalf.
Brokers are paid on commission, generally speaking, and brokers usually have no preference which loan the borrower chooses. At banks, executives offer incentives to their loan officers to push certain loans. These loans are lucrative for the company, but may not benefit the borrower. Consumers are served best when they are presented with options in an objective manner.
Experienced brokers offer a variety of loan options tailored to the borrower, and explain the pros and cons of each. The options the mortgage broker presents should be based on their conversations with the borrower and the mortgage broker should know how to ask the right questions to find precisely what the best options are that provide the most benefit.
A good broker shops lenders to find the best rates. Since brokers get wholesale rates from the big lenders, brokers can pass these savings to borrowers. Usually, the mortgage broker makes his/her money from the rebate paid by the lender to the broker for selling an interest rate that is higher than the “par” pricing rate. But the fact is that these rates are still much lower, on average, than a borrower can get when he goes directly to the lender. A borrower in a bank pays that bank’s retail rates, which are usually higher than wholesale rates.
Canadian laws require that all mortgage brokers be licensed and have a knowledge of financing. Because of the strict licensing requirements, all licensed mortgage brokers pass rigorous testing and background checks, including fingerprinting and criminal background checks. Professional and licensed mortgage brokers will have good financial history and no criminal convictions.
It is very important you trust your mortgage professional since you will be trusting him or her with your most private financial information when applying for a loan.
Ask your mortgage broker to see written testimonials and speak with your mortgage professional directly with any questions or concerns you may have. After having an open conversation with your mortgage broker professional you will clearly see if he or she is the right fit for your needs.
Contact us anytime, we would love to speak with you!