Getting calls on this topic once again so I thought I’d clear the air on this very important topic. So what’s difference? They both arrange mortgages…. and both can offer advice and product select, right? WRONG!!!. The differences are a plenty….I’ll cover the more relevant ones here.
I’ll start with the a quote from a recent Bank of Canada study that tells the story very clearly: “… borrowers who use a mortgage broker pay less, on average, than borrowers who negotiate with lenders directly.” click here for the entire study.
I can probably stop writing after that statement but I wanted to point out a few more things:
- A Specialist works for one Bank or a single Lender. They are employees of the Bank or Lender. They can only offer you one brand of products.
- A Broker is independent. They are not employees of any Bank or Lender. They can offer products from several different Lenders.
- More Lenders competing for your business means betters terms and rates.
- A Specialist isn’t required to be licensed to arrange mortgages. There are no standards for educational requirements (although most Lenders do provide some in-house training).
- A Broker must successfully complete a Provincially regulated Broker course and continue to maintain their good status to keep that license.
- A Broker can provide unbiased advice. They work for you, the borrower.
Look, you wouldn’t ask Burger King who makes the best burgers and expect them to say Harvey’s? So why would you ask a Bank Mortgage Specialist to tell you which Lender has the best mortgage product for you? Enough said.
Banks and Lenders are great suppliers of money, but they can’t give unbiased advice. They can only offer you their products…and they will try to charge the highest rate possible… but that’s okay. They are a business. And they will always try to maximize the profit for their employer, the Bank.
If you would like to compare mortgage products and rates, call your Mortgage Broker.
Don’t have one?, then call me. I’d be happy to help.
416 224 0114