Banks vs. Brokers vs. Us
If you’ve started your mortgage search, odds are you've asked the question: Is it best to get a mortgage through a bank or broker? Your parents, if they’ve had the same mortgage for quite some time, may encourage you to go to the bank, as this is the traditional approach. However, there are many more options available to homeowners, so for such a big commitment, it’s worth looking into all of your options.
Though getting a mortgage through a bank isn’t a bad route to take, there are a few key differences between a bank and broker that may sway your final decision. First and foremost, banks only have access to their own products, so you may be missing out on a variety of services. A mortgage agent/broker, however, is capable of working with a variety of lenders including banks, credit unions, major monoline lenders, and even alternative lenders or private financing. A good mortgage agent will thoroughly outline the different options available and guide you based on your unique needs and goals. Want to work with a Mortgage Agent/Broker but still feel more comfortable having your mortgage held by one of the big banks? Well, they have that covered. The common misconception of the “broker world” not being able to work with the big banks is simply that—a misconception. Mortgage Agents and Brokers have access to some of the top Canadian Banks so you can have the peace of mind of dealing with your current bank while benefiting from the tailored relationship of working with a trusted Mortgage Agent.
Banks also focus on acquisition over retention, meaning they will do all they can to secure your business. However, this does not mean that they will maintain high-quality service after the mortgage advances. For example, the Mortgage Specialist at the Bank who helped set you up with your new mortgage will then pass you off to the branch staff to “manage” your account after the mortgage advances. Meaning you are developing yet another new relationship, building trust, and telling your story all over again. Whereas a Mortgage Agent takes a holistic view of your mortgage journey, not only assessing where you are today but where you want to go in the future. The trusted relationship you have built with that Agent remains intact even after the mortgage closes. They will keep in touch throughout the lifespan of your mortgage term and after. You’re not just another transaction, but a client and friend whose best interest should be at the forefront of every deal.
In addition, a Mortgage Agent will fight for access to competitive rates, present a variety of options, and outline the pros and cons so that all clients are educated and empowered to make the best decision for themselves. Banks typically offer less competitive rates due to the high costs of maintaining bricks and mortar branches. Banks also use a higher calculation for their prepayment penalty, which can cost you thousands of dollars. It’s important to know when this type of penalty applies and how the lender calculates it before signing a contract to ensure you will not be hit with a large penalty if you need to break your mortgage contract, pay back your entire mortgage before the end of the term, pay more than the allotted amount, and so on.
Lastly, a Mortgage Agent or Broker has completed extensive federally regulated education and licensing requirements to achieve this designation. They are also mandated to complete bi-annual continuing education courses to ensure they are always up to speed on the current policies and procedures that may affect your mortgage. This means they offer superior knowledge and expertise compared to bank mortgage specialists, who do not need to complete any type of additional education or hold federally regulated licensing to become a specialist.
So what really is the difference? To make it simple and concise, let’s compare this to ice cream, because who doesn’t love ice cream? A Mortgage Specialist working for a big Bank only serves plain vanilla ice cream in a cup. No hot fudge, choice of cone, or even sprinkles! A Mortgage Agent/Broker has over 40 different flavours of ice cream to choose from, both hard and soft serve, unlimited toppings, and your choice of cup or handmade cone.
Now let’s compare the difference between a Mortgage Broker or Agent you’ve found online with a GreaterThan Mortgage Agent. Agents you’ve found with online services may be convenient and catch your eye with their “lowest rate” marketing, but most do not offer the high level of personalized service that GreaterThan Mortgage Agents do. Clients can punch in numbers, submit paperwork, and get pre-approved in a few simple steps, without speaking to anyone at all. Knowing this is the biggest transaction of your life, it’s important to understand the process and ask the nitty-gritty questions that cannot be answered by an online agent. In keeping with the ice cream analogy, an online Mortgage Agent is comparable to self-service ice cream. It’s convenient, and you can create your cone quickly in a few simple steps. You may have the same amount of flavours and toppings as you would working with GreaterThan, however, the machine may malfunction, and you may end up with basic vanilla instead of that mint chocolate chip you truly wanted. Working with a GreaterThan Mortgage Agent is like going to an ice cream shop where the server asks you a few simple questions and from there is able to create a mouthwatering sundae of all your favourite flavours and toppings without you even having to ask. They answer your questions and guide you to create the best tasting ice cream cone for your taste.
Here at GreaterThan, we take the time to get to know our clients. We will walk you through the process step by step to ensure you have the best mortgage package that will fit your personal needs now and in the future. Now that you know the difference between the bank mortgage specialists, regular mortgage agents/brokers, and a GreaterThan mortgage expert, it’s all up to you. Whether you prefer plain ice cream or rainbow with all of your favourite toppings made personally for you, the choice is yours!
