It is possible to use either a mortgage broker or a bank mortgage in order to finance your home loan. There are pros and cons of each, and in the end it comes down to a personal decision. A mortgage broker is independent and licensed. They earn commissions from the lenders they generate business for. Right now, bank mortgages account for about 60% of the market and the other 40% are through mortgage brokers.
Finding the Best Mortgage Rate in Winnipeg
When it comes to a mortgage loan, you need to do all you can to find the best rate. A bank has a rate that will depend upon the current market and also your credit score. They use a given formula to decide who gets approved and the rate of interest that goes along with that approval. They don’t have any flexibility to work with.
A mortgage broker does have a great deal of flexibility to offer. They have numerous lenders that they work with. This allows them to find a lender that is right for the amount of the mortgage loan applied for, the credit score of the applicant, and other factors. This increases the chances of getting approved if a person has less than traditional credit or income.
Many people have an established relationship with their bank. They do their checking and savings business there. They may have a loan for a vehicle or a personal loan in progress or that they have already paid off. They have some type of ongoing history with that lender so they feel comfortable going to them for a mortgage loan.
For most first time buyers, they are familiar with a banking institution on some level. This relationship can help a consumer feel comfortable enough to ask questions and to decide to get pre-approved for a loan for a home.
With a mortgage broker, they aren’t likely to be someone you have worked with before. The exception is if you have previously purchased a home and got a loan through them. They are going to shop around to get the best deal they can for you. This means there are many other parties in the mix that you never work directly with.
There is no real opportunity to create any ongoing relationship with them. Many first time borrowers aren’t even aware that these brokers exist. However, a mortgage broker will be very familiar with the process and the availability of funds. They can match a potential borrower up with the right lender. If you don’t have the best credit, this could be very helpful with getting you approved.
You do have to be careful though due to the fact that a mortgage broker is paid by commission. There could be fees that you still have to pay so find out in advance. The other issue is that the broker may get you approved by the lender that offers them the most commission, not necessarily the one that offers you the best overall deal.
The process of meeting with a mortgage loan officer at the bank is very straight forward. You schedule an appointment and show up for it. They will go through the paperwork with you and get things started. They will let you know what additional documents they need along with a deadline for providing them. Typically, a bank is open weekdays from 9 am until 5 pm. You may have to take some time off work to get into the bank for an appointment.
With a mortgage broker, they have more flexibility with the time. They may be able to talk with you in the evening or on the weekend. However, you often won’t be meeting with them face to face. Most of their interactions take place online through chatting or through emails. You may be able to schedule a phone call in lieu of a face to face meeting.
It certainly doesn’t hurt to shop around and see what options you have. While it is understood you may wish to start with your current bank, they aren’t the only choice out there. Explore several banks and their lending process. Look into various mortgage brokers that have a good reputation. As you carefully weigh all of what is offered and compare it to what you really want, then you will be able to move forward with who you should apply with for your mortgage loan.