Getting a mortgage to buy a house is one of the most significant financial decisions you’ll ever make. Given the complexity and stress involved, it’s essential to have trusted experts by your side throughout the process.
As you start your journey to obtain a mortgage, you might find yourself weighing the options between going directly through your financial institution or working with a mortgage broker. Both choices are valid, but it’s essential to consider which one aligns best with your needs.
In this article, we aim to guide you in making the right decision!
Working with your financial institution: is it the right choice?
Many individuals prefer to apply for a mortgage through their long-standing financial institution. After all, if you’ve established a relationship with your bank, it’s natural to continue using their services for significant decisions like this.
Consider this scenario:
You’ve been a loyal client of a larger bank for several years. When you need assistance, you naturally turn to your trusted bank advisor, who knows your financial history well. They’ve been there for you when you opened your TFSA, helped you with your RRSP, and guided you to the best high-interest savings accounts. With this solid professional relationship, you feel confident that they will refer you the most suitable mortgage options within their institution when it’s time to secure a mortgage.
There’s absolutely nothing wrong with choosing to work directly with your financial institution for your mortgage needs. In fact, this approach can have several advantages. However, it’s essential to carefully weigh the pros and cons and recognize that there are other options available, should you wish to explore them. Let’s take a closer look.
Advantages of choosing your financial institution
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Convenient location
Most people choose a financial institution that is easily accessible, making it straightforward to attend appointments and sign important documents. Opting for your financial institution means that you can work with a branch near your home.
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Consolidated financial products
If you’ve been a client of a financial branch for several years, it’s likely that all your financial products are held there. This includes:
- Checking and savings accounts
- TFSAs and RRSPs
- Life, home, and auto insurance policies
- Personal loans
Having everything in one place allows you to manage your finances more easily and efficiently.
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Potential discounts
Many financial institutions offer benefits, such as discounts, to clients who consolidate their financial products in one location. This can lead to additional savings over time.
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Established relationships with employees
By dealing with the same branch for years, you may have built relationships with certain employees. During the complex and stressful process of obtaining a mortgage, you may prefer to turn to experts with whom you already have a good professional relationship and fully trust.
Disadvantages of choosing your financial institution
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Limited range of mortgage products.
One significant disadvantage is that the employee at your financial institution typically have access to a limited selection of mortgage products. While they aim to offer personalized options tailored to your needs, they can only offer you products from their own brand.
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Institutional interest
Although their mission is to help you find the mortgage that best fits your financial situation and goals, it’s essential to remember that they are primarily employees of the institution. This means their primary focus may align more with the interests of the bank rather than your individual needs.
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Potentially irrelevant product recommendations
During your mortgage application, it’s possible that the lender at your branch may suggest other financial products that are not necessarily beneficial for you. For instance, they might promote mortgage life insurance, which may not be the best fit for your situation.
Should you consider working with a mortgage broker?
Have you considered working with a mortgage broker instead? A mortgage broker is a specialist who helps you find the best mortgage options available. They guide you through the process, providing valuable advice and assistance tailored to your specific project and financial situation. Collaborating with a mortgage broker offers several key advantages and very few disadvantages. Let’s dive in.
Advantages of working with a mortgage broker
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Access to multiple lender
Mortgage brokers work alongside multiple financial institutions and independent agents. This independence allows them to offer you a wide range of mortgage products from various lenders, broadening your options.
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Expertise in the field
With extensive knowledge of the mortgage market, brokers can identify unique and customized products that meet your specific needs, ensuring you find the best fit for your financial situation.
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Negotiation skills
Brokers also act as intermediaries in the transaction, serving as skilled negotiators who advocate for your interests. They can help secure the best products at the most favourable rates, potentially saving you money.
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Ability to handle complex cases
If you have a poor credit score or a less-than-ideal payment history, a mortgage broker can navigate these challenges. They know how to find suitable solutions for nearly every unique situation their clients may encounter.
Disadvantages of working with a mortgage broker
While working with a mortgage broker offers numerous advantages, it offers very few disadvantages. Any disadvantages may largely depend on your personal preferences:
- Do you prefer working with someone from your financial institution whom you already know?
- Have you struggled to build a trusting relationship with your mortgage broker?
- Does their communication style not align with your preferences?
Each person’s experience is unique. However, it’s important to note that a mortgage broker is often the most qualified expert to help you find the perfect mortgage products tailored to your needs.
Are you looking to secure a mortgage loan?
XpertSource.com can help you in your efforts to find a mortgage broker. By telling us about your project, we will refer you to top-rated experts, free of charge! Simply fill out the form (it only takes 2 minutes) and you will be put in contact with the right experts.
