If you’re planning on purchasing a home you’ll need to decide if you’re going to use a mortgage broker or a bank for your financing. So…what’s the difference?
The best way I like to explain it is with an analogy. Imagine you’re planning on purchasing a vehicle. You probably have a checklist of what you’re looking for; if you’re a family then you might want a spacious car that is safe for your kids, but if you’re young and single then you might want a fun and fast car. If you decide to go to a FORD dealership to buy your vehicle, the dealership will be able to offer you FORD cars only, even though Nissan, Honda or Ferrari might be a better fit for you. On the other hand, if you go to a vehicle broker, they will look at your list and will search ALL the dealerships in order to find a make and model that best suits your needs.
Banks and mortgage brokers kind of work the same way. A bank will be able to offer you their products only, whereas a mortgage broker will be able to offer you all the products and rates that are available on the market. So if you want to shop around, then a mortgage broker is the way to go.
One of the main advantages of using a broker is that they usually make themselves readily available and will work for you around the clock. If I have a question on Saturday night at 8pm I know I can reach the mortgage broker right away. Whereas with the bank, I’m working with their hours. This might not seem like a big deal but it certainly is when you’re working in a multiple offer scenario for a client and need a quick response. In a hot market, speed is essential and mortgage brokers know this. That’s why they will work their hardest to get a response – usually within 24 to 48 hours – in order to meet deadlines for financing. They can also work with multiple lenders to see who can get back to us the fastest with the best rates and products.
The other advantage of working with a mortgage broker is that they are genuinely interested in building and growing a relationship with the client. A broker wants to help you with your current transaction, but also with your future goals. For example, if your goal is to have an income property then a broker can let you know how to get there. If you’re planning on growing your family and will need to upgrade to a bigger home in 5 years, a broker can help you with the transition.
Having a mortgage broker by your side can be very valuable. Not only will they work diligently with your Realtor® to ensure the transaction is as stress free as possible, they will be there to provide guidance, advice and knowledge every step of the way.
If you’re looking for a reputable Mortgage Broker or have questions about qualifying for a mortgage, reach out to me. I can help steer you in the right direction.