When looking where to get a mortgage, Canadians have the choice of either getting a mortgage with their bank, a credit union or a mortgage broker.
There are pros and cons of working with each of these choices. I’ll do my best in this blog post to be as unbiased as possible. I am a mortgage broker and believe we can provide an exceptional service. However, not all mortgage brokers are created equal & I’ll give you some suggestions on how to find the right one for you.
When you are thinking about where to get a mortgage, you should begin your search online. There is a wealth of mortgage information available on the internet for Canadians. The #1 tip I can give is, make sure the content you are reading is CANADIAN. Mortgage rules, interest rates & calculations, High-Ratio Insurance and real estate laws are completely different in Canada than the United States. Make sure the website you’re visiting is Canadian.
For more tips on searching for a mortgage online read: How to Shop for a Mortgage Online
Getting a Mortgage From Your Bank
A bank is still the #1 one place where Canadians get a mortgage. I believe that most Canadians do so because they like working with somewhere or someone they know and feel comfortable with. That’s great! There is however a few downsides to working with just one bank.
Would you believe me if I told you that loyal bank customers actually pay more? Read this post on Competition in the Canadian Mortgage Market and you’ll be surprised.
When you deal with your bank directly, the personal banker or mobile mortgage specialist working for that bank is only concerned with maximizing the profits for their employer. Their job is to charge you the maximum possible rate while still retaining your business. They are also only able to offer you a mortgage from their institution. While this may suit many, it might not be right for you.
6 Mortgage Questions to Ask Your Bank
Further reading: There’s More to Consider Than Rate
Getting a Mortgage From a Credit Union
Credit Unions are becoming an increasingly popular option for Canadians to get a mortgage. Many consumers are actually moving their money & mortgages to Credit Unions because they are unhappy with the Big Banks. The recent RBC outsourcing debacle is a good example.
Credit Unions have competitive mortgage rates and good mortgage products. There is however some cons when dealing with a Credit Union. Firstly they don’t offer mortgages outside their lending areas so if you are with a smaller Credit Union you may not be able to port your mortgage if you decide to move. This is something to SERIOUSLY consider. Situations can change, and I’ve seen clients that have had to relocate because of their job and had to pay a hefty mortgage penalty because of it. There is also usually a few additional conditions they sometimes require in order to obtain their very best rates.
Further reading: What Credit Unions Don’t Tell You
Getting a Mortgage From a Mortgage Broker
What Does a Mortgage Broker Do?
As independent mortgage brokers and mortgage agents, we’re not tied to any one lender or range of products. Our goal is to help you successfully finance your home or property. We’ll start by getting to know you and your home ownership goals. We’ll make a recommendation, drawing from available mortgage products that match your needs, and we will decide together on what’s right for you.
Save time with one stop shopping – It could take weeks for you to organize appointments with competing mortgage lenders — and we know you’d probably rather spend your time house-hunting! We work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. It makes comparison-shopping fast, easy, and convenient.
We negotiate on your behalf – Many people are uncertain or uncomfortable negotiating mortgages directly with their bank. Brokers negotiate mortgages each and every day on behalf of Canadian home buyers. You can count on our market knowledge to secure competitive rates and terms that benefit you.
More choice means more competitive rates – We have access to a network of major lenders in Canada, so your options are extensive. In addition to traditional lenders, we also know what’s being offered by credit unions, trust companies, and other sources.
Get expert advice – When it comes to mortgages, rates, and the housing market, we’ll speak to you in plain language. We can explain the various mortgage terms and conditions so you can choose confidently.
No cost to you – There’s absolutely no charge for our services on typical residential mortgage transactions. How can we afford to do that? Like many other professional services, such as insurance, mortgage brokers are generally paid a finder’s fee when we introduce trustworthy, dependable customers to a financial institution.
Further Reading: How do Mortgage Brokers Get Paid?