Fall is coming, which means that the market is about to pick up again. Most first-time buyers ask us what the difference is between a mortgage broker and a bank. Buyers and sellers tend to assume that a bank is better and that mortgage brokers are, by definition, a bit shady. This is not true.

The primary difference between a bank and a mortgage broker is that a bank is working for itself, and a mortgage broker is working for you.

★ If you want to learn more about working with a mortgage brokers and banks, have a look at these posts:

The Bank is Working for Itself

Banks have in-house mortgage specialists who arrange mortgages for their clients. They only offer you the mortgage products that their bank has at the time. So, if you’re with Scotiabank, you’ll get a Scotiabank mortgage.

Although the mortgage specialist may be working hard for you, ultimately, they are employed by the institution and need to make sure they protect the bank. They also don’t make themselves super available to you. You likely won’t get your specialist’s cell number, and you can’t call after work hours.

A Mortgage Broker Works for You

A Mortgage broker will be paid a commission for the mortgage that they get for you. That commission comes from the lender, not from you. They are therefore highly motivated to help you get a deal. They can also shop your file around to many different financial institutions to ensure that you are getting the best deal.

Mortgage brokers are like your talent agents with banks. They create a nice little file for you, and they know how to write up applications that banks will approve. You can often call them on their cell phones at all hours (like real estate agents!)

Ultimately, there is no wrong way to get a mortgage. However, you may get better mortgage terms with a mortgage broker. Mortgage brokers are often more hands-on and more transparent than banks.

If you have any more questions about this, let us know!

As always, stay safe.

Robyn VanderVennen
The Kim Kehoe Team

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