There was an article in the Globe and Mail recently entitled ‘Why use a mortgage broker?’. No, this image wasn’t part of the article but it’s an image that many will conjure up when we hear the word ‘Banker’.
The article talks about why Financial Planners and other professionals will recommend, and work with, a Mortgage Broker vs. having the client go directly to the Bank. Here’s a few quotes from the article that make it easy to understand.
- “It’s the most efficient way to get the best-priced and best-structured mortgage”.
- “So rather than shopping at multiple financial institutions and negotiating with each financial institution and arm wrestling them to give you the best deal, it’s one phone call and they do the rest for you.”
And here’s some facts from a Bank of Canada review published in February 2011 entitled ‘Competition in the Canadian Mortgage Market’:
- This one is no surprise…. “The results also indicate that borrowers who use a mortgage broker pay less, on average, than borrowers who negotiate with lenders directly”.
- Here’s one that may surprise many of you… “The results also indicate that higher income households pay higher rates, on average, than lower-income households.”
- And here’s another one… “Banks also offer larger discounts to new clients than to existing clients.”
I’ll add a few more of my own…. A broker shops the market…doesn’t work for any one lender but instead works for the borrower….. and provides the borrower with clear, neutral and unbiased advice. Brokers save borrowers money and will continue to shop for better rates at renewal and throughout the life of the mortgage…