If you are considering buying a property or have a mortgage up for renewal, you might assume that your primary bank (the one you use for your daily needs) will always offer you the best options and advice – however, you might want to rethink your plan and read this first.
Here are four things your bank won’t tell you and four reasons which explain why working an independent mortgage agent is in your best financial interest.
Banks have Limited Access to Mortgage Products
This may seem straightforward, but if you’re working with a single financial institution, they can only offer mortgages from their product catalogue. Working with a single institution significantly reduces your options, especially if your financial situation is complex and has a lot of moving parts.
In contrast, dealing with an independent mortgage agent, you will have access to products from over 30 lenders, including Banks, Credit Unions, Mortgage Companies & Private lenders. Working with an independent mortgage agent will give you considerably more options to secure a better mortgage from one of our lenders. By working directly with wide range of lenders, we will work with you to find a mortgage product that suits your needs and goals.
Banks Employees are Salespeople, not Mortgage Experts
Yes, the friendly teller and the people who sit in the branch offices are ultimately all salespeople. They have sales targets and quotas that must be met. Banks pay and incentivize their staff to sell their own products from their product catalog. Looking for proof? Check out this article from CBC News regarding employees at Canada’s 5 big banks speaking out about pressure to dupe customers. If the bank incentivizes a banker to make a profit for the bank, how can they at the same time advocate for you and your best interest?
When you work with an independent mortgage professional, you get the experience of someone who understands the intricacies of mortgage financing and will advocate on your behalf to get you the best mortgage – ultimately, we get paid by finding you the best product. Although we get paid by the lender, that lender has had to compete with other lenders to earn your business with the hopes we select their product from the lineup of options.
Banks Rarely Offer You Their Best Terms
Banks are in the business of making money which they use to pay their shareholders and executives some outrageous salaries and bonuses. Plus, all those flashy branches cost a lot of money to build and operate – the money comes from somewhere… Are you catching on yet? As such, banks will rarely offer you their best terms at the outset of your negotiation and I’ve seen it and experienced it firsthand.
This is especially true if you’re looking to refinance/ renew your existing mortgage. With over half of Canadians simply accepting the renewal offer they get sent in the mail without question, banks don’t have to put their best rate forward. Instead, they rely on you to be ignorant of the mortgage process and will take advantage of your trust your place with them. This is your golden opportunity to work with a mortgage agent to review your options from a wide array of lenders.
When you work with an independent mortgage professional, we don’t play games with rates and terms. Our goal is always to seek out the lender who has the best mortgage for you from the start of the process. There is no reason for us to do otherwise. In fact, the better we do our job, the more likely it is that you’ll be happy with our services and refer your friends and family.
Banks Promote Restrictive Mortgage Products
As if it’s not bad enough that banks don’t offer their best terms upfront, they actually promote mortgage products which are restrictive in nature. Have you ever asked yourself why they say the 5-year fixed mortgage is the best mortgage to be had (remember banks are in the business of making money…)?
Now, if you’ve ever heard stories of outrageous penalties being charged, this is what’s called an Interest Rate Differential penalty (IRD). Each lender has its own way of calculating the IRD. However, when you work with an independent mortgage professional, we take the time to listen to your goals (short term & long term) and assess which lender / product would best suit your needs.
Ultimately, working with an Independent Mortgage Agent is in your best interest
Banks are limited to their own mortgage products and when you work with a mortgage agent, it’s the opposite experience with 30+ lenders to choose from. Working with an independent mortgage professional gives you mortgage options and we always beat them on service and knowledge!
So, if you’d like to talk about the best mortgage product for you, I look forward to working with you and feel free to connect at any time.