Shopping for a Mortgage: Brokers vs. Banks 🏦

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Shopping for a Mortgage: Brokers vs. Banks – Shopping for mortgage rates

Buying a home is a busy time. Between house hunting, daily errands, picking the

kids up from school, and dealing with your agent and lawyer, you’ll need to find

time to go mortgage hunting. Some people will spend more time shopping for

the perfect phone than their mortgage. Your mortgage is most likely the largest

debt of your lifetime. Taking the time to shop for it is time well spent. With

mortgage-rate comparison websites like RateHub.ca, RateSpy.com,

RateSupermarket.ca and LowestRates.ca, it’s easier than ever to compare mortgages.

A mortgage rate even 0.1% or 0.2% lower can mean saving

thousands of dollars in interest over the life of the mortgage.

There are two main places to shop for a mortgage: at your bank or with a

mortgage broker. Brokers are popular in Canada—about half of new mortgages

were obtained through a broker in 2015.3 Consider these points when deciding

between brokers and banks.

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Mortgage Brokers – Shopping for mortgage rates

Pros

Time and money saver: Using a broker is a lot like using the express

checkout at the supermarket. Brokers save you time and money by looking

at the mortgages that best suit your financial situation.

Lower rate: Through a broker, you can often get a rate lower than you

would get if you went directly to a bank. Some lenders offer lower rates

exclusively to brokers.
Unbiased advice: Brokers are able to offer unbiased opinions. They are

typically paid the same by each lender, so they have no vested interest when

it comes to recommending the best product.

No cost: Typically, you won’t be charged fees for a broker’s services—the

lender usually pays the broker when your home purchase closes. (However,

you may be charged fees if you have a poor credit history or no credit

experience in Canada.)

Protect your credit score: Mortgage brokers know how to shop around

among lenders without each inquiry counting as a hard hit. Since your

broker only has to request your credit report once, your credit score is

protected.

Greater choice: Brokers deal with a wide variety of lenders, including

banks, credit unions, trust companies, private lenders, and pension funds.

They have a better chance of finding the best mortgage for you.

Flexible hours: Many brokers offer more flexible hours than banks (I

spoke with my broker on weekends while he was at his cottage). Often, you

can deal with your broker over the phone and the Internet without ever

meeting face to face.

Cons – Shopping for mortgage rates

Look out for yourself: Although most brokers are honest, there’s always

the risk that your broker could encourage you to sign up for a mortgage

with a higher rate to pocket a heftier commission. So pay extra attention to

the mortgage’s annual percentage rate on the mortgage approval (brokers

are forced to show you this). If the mortgage rate is 2.99% but a fee is

tacked on to bring it up to 3.99%, that’s a red flag! Before signing on the

dotted line, ask your broker, “Is this the lowest mortgage rate available?”

And don’t just take their word for it—spend 10 minutes checking a

mortgage-rate comparison website to make sure you can’t find a lower rate.

Broker discrimination: Some lenders won’t deal directly with brokers, so

you may still need to shop the market on your own.

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Banks – Shopping for mortgage rates

Pros

Perks: Your bank may throw in perks like a no-fee chequing account or

may waive the home appraisal fee.

Extra services: Banks often offer extra services like mortgage planning and

homebuying seminars.

Stability: You can rest easy knowing that if you get a mortgage with the

big banks aren’t likely to go belly up.

Personal service: It can be convenient to stroll to your local bank branch.

You can meet your banker face to face to discuss your mortgage needs.

Read More for more information: Qualify for a Mortgage: Mortgage Qualifying Tips with Low Income

Cons – Shopping for mortgage rates

Less choice: The bank can only recommend mortgages it offers. You’ll

need to look out for your own best interests. The bank isn’t likely to tell you

there’s a better-suited mortgage at their competitor.

The time needed: We’re all busy. It takes a lot of time to visit several banks

and apply in person.

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Lower credit score: Applying at too many banks can lower your credit

score (because of the number of hard hits). It’s best to apply only to those

you’re serious about using.

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Negotiating: You’ll have to haggle with your bank for the lowest rate.

Your bank may not be willing to budge on the posted rate unless you prove

to them you can get a better rate elsewhere.

Less expertise: Bankers may not be as knowledgeable as brokers about

mortgages because they deal with a variety of financial products, rather

then focusing on mortgages.

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Higher mortgage penalties: This is especially relevant if you’re signing up

for a fixed-rate mortgage. The big banks calculate fixed-rate penalties using

their posted rates. This can lead to a hefty mortgage penalty if you break

your mortgage (more on this below).

Read More for more information: Mortgage Burning: 5 Key Mortgage-Burning Takeaways

FAQ

How to get mortgaged land registry done?

Under the order by Hari Ranjan Rao, Principal Secretary, General Administration Department, now all over the district including Biaora city to get the land beaten (to record the complete information of the land owner in the entry of measles) and to free the mortgaged land in the bank and register the land mortgage. The application will have to be made by depositing the prescribed fee at all the seven public service centers.

How to view mortgage land?

How to View Mortgage Land Online?
Step-1 Open the website to view the land
Step-2 Select the Khasra Details option
Step-3 Select District Tehsil and Village Name
Step-4 Enter Khasra Number
Step-5 View Mortgage Land
Step-6 Check mortgaged land by the name

What do you understand by mortgage?

A hostage is a person or other thing that is confiscated by one of two belligerent parties as their own security for an agreement or as a preventive measure against war.

What is mortgaged property?

A mortgage is a financing option in exchange for title to the debtor’s property, with the condition that if the paperisson defaults on the loan the mortgaged property will be taken over for foreclosure and payment of the loan, making the transfer of title void.

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