Bank Specialist vs Mortgage Broker SIMPLIFIED

[civicHB]

The question of whether to use a bank vs. a mortgage broker seems to come up every few weeks and this might help those that are unfamiliar with the pros/cons of each. .

BANK SPECIALIST
This would be the person you would use if you went to your local TD/BMO/RBC e.t.c. (Some of them even can come meet you...mobile specialists I believe)

Advantages

Convenience/ease of viewing current mortgage balance:
If you already do your banking with the bank you are seeing, then you have one central location for all your banking/mortgage financing needs. You can view balances online with the rest of your statements and such.

Mortgage might make you eligible for more perks/features with the bank:
As an example, RBC may waive the monthly account fees (for your ATM transactions and such) if you have a mortgage, visa and chequing account through them. You are also building a relationship with a bank and they do have lots of services that you may need later on, auto Insurance/ property insurance e.t.c

Possibility of less paperwork when applying for the mortgage:
If you plan on using the bank you already bank with, then they already see your direct deposit pay stubs and any other assets (rrsp's, saving...e.t.c). They would not require you to provide them with the info. This is a minor pro, but still a pro.

Disadvantages

Banks posted rates are typically higher than the competition:
Usually you have to negotiate with a bank; they don't come out firing with the best rate available. It is possible that they'll match what you get elsewhere...but why should they make you go shop for the best rate?

Bank Specialist works for the bank, NOT for you:
The bank specialist is employed by the bank and is looking out for the banks best interests. The specialist might also try convincing you to add on other of the banks products. I could go on about how much of a negative this is but I'll leave it at that.

You will need a separate credit check for each bank specialist you plan on visiting:
This is a minor negative, but still a negative. Also, if one bank disapproves you, then you will most likely be wasting your time by visiting other banks, thus possibly minimally affecting your credit score.

MORTGAGE BROKER
This would be the person helping you if you went to a mortgage brokerage office. Typical names that might be familiar are The Mortgage Group, CanEquity, AlbertaMortgageCentre..e.t.c

Advantages

Mortgage Broker works on YOUR behalf:
The broker is independent of the lending institutions and has no ties to any of them. The borrower can be confident that they are receiving the best rate accessible by that particular broker. There is no need to negotiate and wonder/ponder if you received the best possible rate.

Mortgage Broker has access to many lenders:
This is pretty simple, based on the information collected the broker will know which lending firm would be able to best cater to the individual. Some lenders like first time buyers, some like investment borrowers, some like sub-prime applicants e.t.c


Better access to your mortgage broker, most are available 24/7:
Most banks are your typical 9-5, but with a broker most are available pretty much any time. Kind of like a real estate agent.
I'm not sure how the bank mobile specialists’ work, but they may also be available 24/7.

One credit check:
The broker only uses one credit check and does not need to request multiple records for each lender that he decides to submit your application to.

Training:
Mortgage brokers usually undergo a much more rigorous training in order to be legally allowed to sell mortgage products. There is a governing body and there are rules/guidelines that have to be followed. Mortgage brokers also work with multiple lenders and should be knowledgeable in products offered by the various lenders they use.

Disadvantages

NoName/Unknown, Too many small/independent Brokerages:
There are very many mortgage brokerage companies out there now, some have no actual offices and have been in business for very short periods of time. This could be a concern incase complications happen two or three years after you have bought a house. Ideally you would like to have a well established company handling your biggest purchase.
Just ensure you do your research on the mortgage company you plan on using.

The other disadvantages of a mortgage broker are the exact opposite of advantages to using a bank specialist.

Convenience/ease of viewing current mortgage balance:
You would have to go to a separate site (possibly email or call the mortgage company) to get up to the minute balances. This is more of an inconvenience than a disadvantage.

Mortgage might make you eligible for more perks/features with the bank:
Most banks now have many non-banking related products, auto/property/travel/health&dental insurance. There may be discounts available if you have your mortgage and everything through them. Although, there are very knowledgeable mortgage brokers who can point you in the right direction for all your other needs.

I will update this if I can think of anything else, hopefully it is unbiased. If not, mods please advise me and I’ll make the recommended adjustments

Bemnet

[sputnik]

Nice ad.

Hope you are a Beyond sponsor.

However there is something you neglected to mention.

I have gotten my last 3 mortgages through TD and their mortgage specialists. They essentially work on commission for TD and will give you the same rates as the mortgage brokers can get.

All I did was fax them the latest rates from a competing broker (like those posted on your website) 30 days before my mortgage was set to close and they have matched the rates every time.

This gave me the ability to get the best rate available but still have the flexibility with my mortgage conditions that very often the smaller lenders don't offer.

[kkhakh]

Sputnik,

It doesn't bother you that they wont offer you the best rate on their own?

You have to back them into a corner before you get what you already deserve. So much for a long term relationship...

Our banks love to boast about how they are all about their customers however they don't act on those premises.

Talk-the-Talk but never walk-the-walk!!

[sputnik]

Originally posted by kkhakh
Sputnik,

It doesn't bother you that they wont offer you the best rate on their own?

You have to back them into a corner before you get what you already deserve. So much for a long term relationship...

Our banks love to boast about how they are all about their customers however they don't act on those premises.

Talk-the-Talk but never walk-the-walk!!

Not really.

For me the choice of lender and flexible conditions is more important than saving .10% on my mortgage rate.

So I pick my lender first (TD) and then grind them for another .10% if I happen to find a lower rate online somewhere.

The problem with mortgage brokers is that they give the impression to their clients that having the lowest rate is the most important part of their mortgage. When in reality I like having lenders that are flexible with things like amortization lengths, increasing payments or making larger lump sum payments.

When you go to a mortgage broker they show you the lowest rate and you are sometimes sucked into a mortgage that might have a low rate but has crappy terms or is with a little lender. That is not worth the .10% rate change.

Another thing that people have to recognize is that the banks "best rates" are usually the rates that they can hold for 120+ days. Meanwhile the mortgage broker "best rates" can sometimes only be held for 30 days.

[syeve]

All good points, just a couple of things...

First off, I still don't get why people think they can't view their mortgage info online if they go through a broker...I used a broker, she found a great rate at ATB, I now go to the atb website and view any mortgage details I want, again, the broker on BROKERS the deal. Once the mortgage is finalized your business is done. That leads to my second issue;

NoName/Unknown, Too many small/independent Brokerages:
There are very many mortgage brokerage companies out there now, some have no actual offices and have been in business for very short periods of time. This could be a concern incase complications happen two or three years after you have bought a house. Ideally you would like to have a well established company handling your biggest purchase.
Just ensure you do your research on the mortgage company you plan on using."

I couldn't care less if the broker I used goes out of business the next day, if he/she gets me the best rate, that's all I care about.

Other than that I think it's a pretty good summary.

[Mibz]

I got extremely flexible conditions through a broker. Honestly I don't see any difference between the two except that my buddy the mortgage broker gets the commission instead of that guy that works at the bank :P

If I had a friend who did mortgages at the bank I'd probably end up using him instead.

[Tik-Tok]

Originally posted by kkhakh


It doesn't bother you that they wont offer you the best rate on their own?


Does it bother you that car dealerships don't offer you the best price on their own? Or stores, or any private sales?

It's how people/business's make money :dunno: If you think brokers are working solely in YOUR best interest, your out of your mind. They're making profit, just like anyone else.

Personally, it only took talking to 2 brokers, and 2 banks (my previous mortgage bank, and my daily banking one) to find a kick ass deal last spring (3.79%, 2% cash back, 5 year fixed).

[civicHB]

Very valid points sputnik, and this is why it is important to ensure that you are dealing with a reputable and competent mortgage broker. There are more important things other than the rate; pre-payment penalty, amortization lengths e.t.c and a competent broker would ensure that all aspects of your mortgage are win win...not just the rate.

As far as a little lender is concerned, as long as the loan conditions are appropriate, size of lender should not matter.

Bemnet


Originally posted by sputnik


The problem with mortgage brokers is that they give the impression to their clients that having the lowest rate is the most important part of their mortgage. When in reality I like having lenders that are flexible with things like amortization lengths, increasing payments or making larger lump sum payments.

When you go to a mortgage broker they show you the lowest rate and you are sometimes sucked into a mortgage that might have a low rate but has crappy terms or is with a little lender. That is not worth the .10% rate change.

Another thing that people have to recognize is that the banks "best rates" are usually the rates that they can hold for 120+ days. Meanwhile the mortgage broker "best rates" can sometimes only be held for 30 days.

[civicHB]

10 questions to ask your banker


1. What long-term mortgage strategies do you propose for your customers and why?

2. What are your accreditations as a mortgage professional? For how long have you been arranging mortgages exclusively? How many mortgages do you arrange in a year?

3. How many different mortgage products do you offer? If I don’t like the products you offer, what other options can you give me?

4. What kind of follow-up service do you deliver after the mortgage has funded?

5. What tools do you have that will help me pay off my mortgage quicker? Is there a penalty if I pay my mortgage off too quickly?

6. If I take a variable rate mortgage, and choose to lock into a fixed mortgage, what will be involved? What type of rate guarantee will you
offer on conversion?

7. Does my credit score affect the rate you offer, and if so, how?

8. What is the up-front charge for mortgage insurance? Should we include it in our mortgage or pay it in advance? Why?

9.If I didn’t do business with your company, which other companies
would you suggest and why?


10 questions to ask your broker



1 What is your opinion on the future movement of interest rates? why?

2. What long term mortgage strategies do you propose for your clients? Why?

3. What is your process for ensuring I am informed and prepared for each step of the process?

4. What are your accreditations as a mortgage professional? How long have you been arranging mortgages exclusively for? How many mortgages do you arrange in a year?

5. What tools do you have that will help me pay off my mortgage more quickly? Is there a penalty if I pay my mortgage off quickly?

6. Would you suggest a mixed or variable rate mortgage? Why?

7. What is the up-front charge for mortgage insurance? Should we include it in our mortgage or pay it in advance? Why?

8. What are some popular mortgage products on the market that you don’t have access to?

9. If I didn’t arrange my mortgage with you, who would you suggest and why?

[dezmarez]

Originally posted by Mibz


If I had a friend who did mortgages at the bank I'd probably end up using him instead.


or someone you met on beyond ;) haha

all in all a good summary,

bank specialist is also able to give you overall advice not just on the mortgage side, when in reality, mortgages and investments go hand in hand...

IE) paying off your mtg faster or contributing to your rsp's,
they then can offer you advice on which type of investment to go into your rsp's so and and so forth... maybe you need a ULOC to furnish your home, the bank rep dealing with your mortgage knows your situation..better relationship...better chance of getting approved..

both have their pros and cons...

[ExtraSlow]

I got screwed on my last mortgage through a broker.
He set everything up with my bank, the same bank as the house I was selling. Assured me since it was the same bank for each one, I wouldn't get the termination penalty. He told me he'd worked that out with them. That was a major factor for me, since the penalty was large.
In the end, the bank hit me with the full, hefty penalty, and they refused to budge on it, despite the fact I was opening a new mortgage from which they would make much more money. My mortgage broker was extremely unhelpful, and eventually stopped returning my calls.

Lesson learned. Get everything in writing. "Relationship" is good for nothing.

[Mys73ri0]

Originally posted by ExtraSlow
I got screwed on my last mortgage through a broker.
He set everything up with my bank, the same bank as the house I was selling. Assured me since it was the same bank for each one, I wouldn't get the termination penalty. He told me he'd worked that out with them. That was a major factor for me, since the penalty was large.
In the end, the bank hit me with the full, hefty penalty, and they refused to budge on it, despite the fact I was opening a new mortgage from which they would make much more money. My mortgage broker was extremely unhelpful, and eventually stopped returning my calls.

Lesson learned. Get everything in writing. "Relationship" is good for nothing.
he got your commission and probably just ran with it... that's a big bonus to dealing with the bank directly... if something goes wrong at least you know where to find them, and if branch doesn't want to help you there's plenty of other branches that will...

out of curiousity, can you set up heloc's through brokers on your mortgages?

[quazimoto]

Here's the issue with mortgage brokers and why in time I am sure they will be phased out or significantly altered by CMHC.

When you walk into a bank and talk to one of their Financial Advisors with setting up a mortgage the person you are dealing with has no financial reason to give you a mortgage they know you can't afford.

Brokers in all honesty do not care about you, the home you are buying, the mortgage you want. They are there simply to collect a commission on your behalf for doing what is a rather simple job. The problem is that when a Broker is making thousands of dollars for setting up your mortgage they will do next to anything to ensure you get that mortgage.

Often times and this has been documentated they will lie and even submit false documents to obtain CMHC approval. Often this has more to do with misrepresentation of revenue from the people applying for the mortgage. Quite often they will set mortgages up for people knowing full well they are most likely not capable of affording the mortgage.

Quite simply the people at the bank will tell it to you as it is. They will tell you if you can afford it. They won't lie to force a mortgage through just because it does not benefit them in any way.

So while they might get you a rate that is .2% or .3% better they really don't care about your needs and interests just remember that.

[sputnik]

Originally posted by quazimoto
Brokers in all honesty do not care about you, the home you are buying, the mortgage you want. They are there simply to collect a commission on your behalf for doing what is a rather simple job. The problem is that when a Broker is making thousands of dollars for setting up your mortgage they will do next to anything to ensure you get that mortgage.

QFT

[civicHB]

Originally posted by quazimoto
Here's the issue with mortgage brokers and why in time I am sure they will be phased out or significantly altered by CMHC.

When you walk into a bank and talk to one of their Financial Advisors with setting up a mortgage the person you are dealing with has no financial reason to give you a mortgage they know you can't afford.


No financial reason? most bank mortgage reps are paid on commission. That is financial reason enough. In fact, banks use some of the shadiest methods to convince buyers to use them vs. brokers. I personally will not process an application that I think the applicant cannot afford, as having someone fall into financial trouble down the road is not my goal. Trying to make a few dollars by processing sub par applications is not worth it.


Originally posted by quazimoto


Often times and this has been documentated they will lie and even submit false documents to obtain CMHC approval. Often this has more to do with misrepresentation of revenue from the people applying for the mortgage. Quite often they will set mortgages up for people knowing full well they are most likely not capable of affording the mortgage.



True. This occasionally happens and the brokers involved in such activities have given the rest of us a bad reputation.
Setting a mortgage for someone that you know cannot clearly afford it is just plain wrong.


Originally posted by quazimoto

Quite simply the people at the bank will tell it to you as it is. They will tell you if you can afford it. They won't lie to force a mortgage through just because it does not benefit them in any way.



haha this is quite laughable. Mortgages are the bread and butter of banks and they are going to great lenghts to keep up with Mortgage Brokers. The number of mortgages processed by mortgage brokers is increasing for a reason.

I'm surprised there are no examples of bad stories that bank users have experienced.

Bemnet

[sputnik]

Originally posted by civicHB
haha this is quite laughable. Mortgages are the bread and butter of banks and they are going to great lenghts to keep up with Mortgage Brokers. The number of mortgages processed by mortgage brokers is increasing for a reason.

I think you misread him.

He was saying that banks have no incentive to get people with bad credit or questionable finances into a mortgage.

The last thing a bank wants is to have to foreclose and sell a house at pennies on the dollar.


Originally posted by civicHB
I'm surprised there are no examples of bad stories that bank users have experienced.


What would be the worst bank story? Paying an additional 20 basis points on your mortgage rate?

I have found my experience with the banks to be pretty rock solid and competitive.

[quazimoto]

No they are rock solid.

No the advisors at banks that setup mortgages DO NOT receive a commission. They do receive a yearly salary however which is not based upon how many mortgages they establish.

Banks do have Mortgage Specialists which are not attached to any branch that are more like mortgage brokers and even then this is where the shady deals come in.

The only thing a broker will do is save you a nominal amount of money. Don't kid around or lie brokers do not care about you, your mortgage rate, your monthly payment, if you can afford it or not. They are simply there to collect a commission.

If anything it is mortgage brokers that will continue to place people in the so-called housing bubble by attempting to force through mortgages through CMHC that shouldn't be done in the first place.

I don't know why you deny this or attempt to make the banks look bad. There are way more horror stories from people using brokers and getting products they never wanted. Heck I was forced into a huge HELOC without even knowing it by a broker.

If brokers were working on a FIXED annual salary all the sudden you would see how they were operating would be totally different as there would be no benefit to the broker to pass through shady deal. I mean come on I know a cab driver that got a $600,000 mortgage off of his salary and his wife's salary when they both combined barely gross $50,000 a year.

[quazimoto]

Originally posted by civicHB


haha this is quite laughable. Mortgages are the bread and butter of banks and they are going to great lenghts to keep up with Mortgage Brokers. The number of mortgages processed by mortgage brokers is increasing for a reason.

I'm surprised there are no examples of bad stories that bank users have experienced.

Bemnet

Banks actually try to push mutual funds and RRSP's above anything else as they are products that are extremely profitable for the bank. A 3% return on an investment is anything a major financial institution would be excited about.

[skandalouz_08]

Originally posted by quazimoto


Banks actually try to push mutual funds and RRSP's above anything else as they are products that are extremely profitable for the bank. A 3% return on an investment is anything a major financial institution would be excited about.

Its very true, mutual funds and other investment products are way more profitable to banks than any mortgage will be.

A majority of bankers work on salary so while they do try to give you a mortgage, most customers are more concerned about the rate they can get rather than the amount they can actually afford. If they can't get it at a bank, then of course they will go to a broker.

Banks try to push relationship building with customers while brokers are a one time relationship type of deal...for the most part. I know lots of brokers that work their butts off for their clients and will go great lengths to ensure the client is happy and will be a repeat customer.

[Toma]

Broker Hands down.

The obvious corruption in the system or kick backs sicken me, but I have owned multiple houses in this city, tried multiple banks, on multiple occassions, presenting the identical info, and EVRYTIME, the broker either got me a mortgage where the bank denied me, or at a better rate.

Once, it was even the same fucking bank that the mortgage ended up at!!

I dunno what kind of crooked BS goes on behind the scenes. And it does piss me off.

But it is what it is.

[sputnik]

edit

[dezmarez]

Originally posted by Toma
Broker Hands down.

The obvious corruption in the system or kick backs sicken me, but I have owned multiple houses in this city, tried multiple banks, on multiple occassions, presenting the identical info, and EVRYTIME, the broker either got me a mortgage where the bank denied me, or at a better rate.

Once, it was even the same fucking bank that the mortgage ended up at!!

I dunno what kind of crooked BS goes on behind the scenes. And it does piss me off.

But it is what it is.



that's because if a bank rep can't get you approved...
they refer the business to the brokers who are able to handle *more complicated* mortgages,
the broker then sends the business back to the branch that originally sent them.

[quazimoto]

And you never once asked what the broker did to push that mortgage through did you. For all you know he added extra numbers to your salary. You walk into a bank for a mortgage they will simply give it to you as it is with no BS. They will take your revenue, the house you want, the mortgage you need and the down payment you have and quite simply they will tell you if CMHC will say yes or no.

If a broker is able to change that answer they are simply changing one of the above variables whether they are doing so truthfully or not is the question.

I kid you not, eventually mortgage brokers will be phased out once CMHC starts to realize the numbers of mortgage defaults coming through from brokers are higher than actual financial institutions.

I still believe they should be paying mortgage brokers on a flat salary and not some commission base which is what leads to incentive to cheat.

[Mibz]

Originally posted by quazimoto
And you never once asked what the broker did to push that mortgage through did you. Yeah, instead of assuming the banks were the ones pulling shady business you might want to take a look at how your broker got that deal....

[Toma]

Originally posted by Mibz
Yeah, instead of assuming the banks were the ones pulling shady business you might want to take a look at how your broker got that deal....

Not a chance. Sure, there are crooked brokers out there, but EVERYTIME I have done this? Not a chance.

And there are some VERY reputable mortgage broker companies out there that are legit, and will not risk their reputation.... VERY reputable.

No, there is something else going on. Of that there is no doubt.

Don't get me wrong. I had 'buddies' involved in that whole phony mortgage racket, getting phony and jacked up appraisals. In fact, there was a whole crew working that "if you let as use your credit to get a mortgage, we'll pay you $4000" etc... I am not talking these guys.

[Pacman]

Originally posted by Toma


Don't get me wrong. I had 'buddies' involved in that whole phony mortgage racket, getting phony and jacked up appraisals. In fact, there was a whole crew working that "if you let as use your credit to get a mortgage, we'll pay you $4000" etc... I am not talking these guys.

Jeesh, you hang out with some classy guys Toma.

[Toma]

Originally posted by Pacman


Jeesh, you hang out with some classy guys Toma.
lol....

That's why the "buddies" was in quotes lol...

[quazimoto]

I don't think he understands.

If you go to a bank and they take your financial records meaning, your yearly income, your down payment, the house you are buying and the mortgage you need. They feed this all to CMHC.

If CMHC comes back saying NO then a variable has to change to get the mortgage passed with CMHC.

Just because you go to a broker for the mortgage CMHC doesn't give a damn. Often .2% of a difference will not be enough to get CMHC approval. They need to alter the equation in some other way to get the approval and most often this is done by lying about the applicants salary.

The people at banks can't be shady. They have nothing to gain quite literally by giving you your mortgage as they are just doing their job. It's not going to make a big difference to them if you get your mortgage or you don't.

[G-Suede]

Originally posted by quazimoto
The people at banks can't be shady. They have nothing to gain quite literally by giving you your mortgage as they are just doing their job.

:rolleyes:

Please don't be so simple-minded.

[Toma]

Originally posted by quazimoto
I don't think he understands.

If you go to a bank and they take your financial records meaning, your yearly income, your down payment, the house you are buying and the mortgage you need. They feed this all to CMHC.

If CMHC comes back saying NO then a variable has to change to get the mortgage passed with CMHC.

Just because you go to a broker for the mortgage CMHC doesn't give a damn. Often .2% of a difference will not be enough to get CMHC approval. They need to alter the equation in some other way to get the approval and most often this is done by lying about the applicants salary.

The people at banks can't be shady. They have nothing to gain quite literally by giving you your mortgage as they are just doing their job. It's not going to make a big difference to them if you get your mortgage or you don't.

I think you were talking to me....

there is NOTHING the broker could have manipulated. I have awesome credit, owe less than 20% of the value of my house, have great income, current taxes, and enough savings to pay the house off entirely if I wanted to.

CMHC is only involved in high ratio mortgages. The broker beat every bank by at least .5%

[dezmarez]

Originally posted by quazimoto
I don't think he understands.

If you go to a bank and they take your financial records meaning, your yearly income, your down payment, the house you are buying and the mortgage you need. They feed this all to CMHC.

If CMHC comes back saying NO then a variable has to change to get the mortgage passed with CMHC.

Just because you go to a broker for the mortgage CMHC doesn't give a damn. Often .2% of a difference will not be enough to get CMHC approval. They need to alter the equation in some other way to get the approval and most often this is done by lying about the applicants salary.

The people at banks can't be shady. They have nothing to gain quite literally by giving you your mortgage as they are just doing their job. It's not going to make a big difference to them if you get your mortgage or you don't.



Which bank do you work for?

I think you aren't understanding Toma, but he just explained it... more than 20% equity in the home, CMHC not involved, most cases (self-employed/new immigrants) 35-50% equity in the home, income confirmation isn't even needed.

Now, most reps at the bank level also have "volume goals", as well as "sales goals", so to say that they have ZERO incentive to give you the best rate isn't really fair because alot of bank reps do fine meeting their sales goals, and need volume, so they give the max. discretion on the mortgage which gives them zero sales, but they receive the volume, which is the actual dollar value of the mortgage.

[Mys73ri0]

Originally posted by dezmarez

I think you aren't understanding Toma, but he just explained it... more than 20% equity in the home, CMHC not involved, most cases (self-employed/new immigrants) 35-50% equity in the home, income confirmation isn't even needed.

Based on your post, it seems you have a pretty good idea how the big 5 banks are run as in you either work there or have worked there. I can't ever see income confirmation not being needed. Just because you had a big wad cash for down payment, doesn't mean that you'll continue to get that kinda cash unless you're sitting on a massive trust fund or something. I also don't think the banks are too interested in carrying mortgages/doing business with individuals who's income come in the form of $20 bills.


Originally posted by Toma

there is NOTHING the broker could have manipulated. I have awesome credit, owe less than 20% of the value of my house, have great income, current taxes, and enough savings to pay the house off entirely if I wanted to.

CMHC is only involved in high ratio mortgages. The broker beat every bank by at least .5%

So is your problem that banks aren't giving you the best rate or not approving you for a mortgage? You're first post was saying how banks wouldn't approve you. Now it's about rates, these are 2 entirely different topics.

If rate is the issue, it's pretty well established that mortgage brokers can probably give you a better rate if you find the right one. There's really no point in complaining about this because there really isn't anything you can do unless you have a REALLY good relationship with your bank.

If it's about getting approved, well if banks aren't approving you but the brokers are then obviously something is up. Mortgage for 20% of house value, great income+ credit+ savings tells me there's something you're not disclosing or you've managed to pick the biggest idiots at any of the big 5 banks to deal with (since you said you've tried more than 1 bank)...

[civicHB]

Originally posted by quazimoto

Just because you go to a broker for the mortgage CMHC doesn't give a damn. Often .2% of a difference will not be enough to get CMHC approval. They need to alter the equation in some other way to get the approval and most often this is done by lying about the applicants salary.



Alter Salaries? Do you honestly think the Lenders do not confirm salaries with the applicants lender? And for self employed three years average of NOA's/T4's are required to prove income.
Things don't fly as easily as they did a couple of years ago.


Originally posted by quazimoto

The people at banks can't be shady. They have nothing to gain quite literally by giving you your mortgage as they are just doing their job. It's not going to make a big difference to them if you get your mortgage or you don't.

I've never seen so much glorification towards banks, it seems like you either work for one or something. This topic was created to shwo the various differences between banks and brokers, so please take your bias elsewhere!

[quazimoto]

I will tell you right now I know first hand of a mortgage that was approved for $600,000+ where the couple was barely grossing just under $60,000 per year. The broker physically pushed the mortgage through under false pretenses. The family wanted the house so all their relatives could live in the house with them and help them pay the mortgage. They couldn't add the relatives to title since they were newly immigrated and barely had employment paying minimum wage.

The idea was they would have 2-3 different families all related living in the same house. This is quite common in other parts of the world but not so in Canada to say the least.

I did find out that the couple go the mortgage through a 3rd party broker without any co-signer or anything like that. So do explain to me how this got through and just how the banks are shady compared to brokers who for the most part knowingly at least a few times a year will force through deals that have no business being done.

Yes the employees at banks do have sales volumes however once again mortgages are no where near a comparison as to what mutual funds and business accounts are. There is still nobody saying hey we'll pay you $5,000 to get this mortgage approved.

Now I'm sure if any mortgage broker wanted to be up front and polite they would tell you that so called mortgage brokers are solely responsible for the sub prime mess in the US since they were the ones getting clients with bad credit approved without thinking twice. The same thing happens all over the place in Canada. There are brokerage firms which even state they specialize in finding mortgages for people with bad or no credit. You tell me how that makes sense. By the way they also now have the same brokers that create the sub prime mess in the united states trying to act as brokers to fix bad mortgages by getting proper re-financing terms. Once again they make a percentage commission off screwing the same people.

I'm sorry but brokerages make their money usually make their money from people the banks won't approve in the first place since people like this don't care about the rates as much. This is also why Mortgage Brokers like to advertise specifically to individuals they know can't get approved at banks. Do you not find this ironic?

[Toma]

Originally posted by Mys73ri0


So is your problem that banks aren't giving you the best rate or not approving you for a mortgage? You're first post was saying how banks wouldn't approve you. Now it's about rates, these are 2 entirely different topics.



READ my man... I have owned many houses in this city, so the 'problems have changed'.

Like I said, at times, it was not being approved, other times it was better rates. Sometimes like stated the mortgage after the broker ended up at the same bank that had denied me etc.

I fully recognize there were crooked brokers out there. I DID NOT deal with them. All were long standing brokers in Calgary from excellent companies with rock solid reputations.

No, there is something definitely foul, there is not doubt about it.

Coming here and saying ALL brokers fudge your info... that is a little hard to swallow.

[quazimoto]

No it's not actually. A lot of people that use brokers specifically do so because the banks will not approve them no matter what due a lack of credit or very poor credit. For some reason many brokers and I mean many will specifically market their services since these people represent the biggest pay day for a broker.

[dezmarez]

Originally posted by quazimoto
No it's not actually. A lot of people that use brokers specifically do so because the banks will not approve them no matter what due a lack of credit or very poor credit. For some reason many brokers and I mean many will specifically market their services since these people represent the biggest pay day for a broker.


I agree with you to an extent, but for the most part, there is no way all these brokers wouuld be able to continue to operate the way they do if they were consantly fudging numbers. It just couldn't happen.

Brokers generate 100% of their own business, so to say they don't care about the customer can't be true, because most of their business comes from referrals from previous clients, or from their other contacts (real estate agents, new home builders)

I still think a bank rep. would be better to deal with as 95% of the time they are able to match the rate a broker is able to get, it is more of are they willing to give that rate to a customer, again full financial advice from one source who can understand your financial picture completely compared to someone trying to find you the best rate.

[civicHB]

Just want to post a scenario we recently run into.

We were working on a mortgage for a temporary worker who has been here for three years and had 5% down payment. The bank was not able to offer us the mortgage for the client through the broker channel but said that they would offer the client a mortgage if he went directly to the branch. So we told the client to go to the bank and he got the mortgage.
Although we could not personally broker the mortgage we still were able to refer the client to the bank that would do it. We made nothing off this deal, but still helped the client and pointed him in the right direction.
Bemnet

[Team_Mclaren]

Originally posted by civicHB
Just want to post a scenario we recently run into.

We were working on a mortgage for a temporary worker who has been here for three years and had 5% down payment. The bank was not able to offer us the mortgage for the client through the broker channel but said that they would offer the client a mortgage if he went directly to the branch. So we told the client to go to the bank and he got the mortgage.
Although we could not personally broker the mortgage we still were able to refer the client to the bank that would do it. We made nothing off this deal, but still helped the client and pointed him in the right direction.
Bemnet

wow what nice people you are to work for free, dont tell me that you werent bitter that you couldnt close the deal tho...:zzz:

[civicHB]

Originally posted by Team_Mclaren


wow what nice people you are to work for free, dont tell me that you werent bitter that you couldnt close the deal tho...:zzz:

haha bitter is a bit strong of a word, sad is slightly more like it. The client will definitely recommend us and it could pay off down the road.:thumbsup:

[el-nino]

Originally posted by civicHB



I'm surprised there are no examples of bad stories that bank users have experienced.

Bemnet


How about the largest fraud in Canadian History???

quazimoto, maybe you should read this. I am pretty sure someone at BMO had something to gain...

BMO FRAUD (http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html)
Brokers don't use BMO as a lender. they couldnt handle us, LOL.

I will admit it, when I became a Broker I was in it for the money. But that has all changed. Buying a house is no joke. Its a big commitment and I treat every deal that comes my way as if it was my own.

I have never done a shady deal and I never will. If i ever met a broker who "fudges" info I would report their asses so damn quickly. They make the good guys look bad.

There are times I could'nt get the deal done then my client has walked into the branch and they got approved with no questions. Very frustrating on my end as I feel the branch may have done something fraudulent.

Anyways, the main point is pros and cons of a Bank vs a Broker. I don't force anyone to use me or Bemnet as a Broker. It's really up to the customer to use us or not.

[kkhakh]

This Quizimoto guy is really hilarious. :bullshit:

You keep on going on about how upstanding the brokers at the banks are and that they have no reason to ever do anything unethical.

Lets all remember the causes of the current GLOBAL recession that we are in right now. It was created by bankers and the banking industry as a whole, not mortgage brokers. A broker is only a means of assuring that you receive the best rates without having to go back and forth with a bank like your at a used car lot. All information that a broker provides to a lender (a bank anyhow) must be verified by documentation. In the end a underwriter working for the bank signs off on these. The broker doesn't have anything todo with that process.

Good luck convincing people that it wasn't the banks.

My uncle runs a company that deals with all these foreclosed properties, he says about 90% of them are financed directly through one of the major banks (RBS, BMO, etc), not surprising at all really.

[l/l/rX]

Hey kkhakh, explain to me what a broker can do to put a deal through that a bank cant. A broker can go through a B lender or if the client really wants to go through a bank institution then they can...?

as for quazimoto's post "If you go to a bank and they take your financial records meaning, your yearly income, your down payment, the house you are buying and the mortgage you need. They feed this all to CMHC."
-you don't think a broker needs all of this? The underwriters require them to supply them with most of this information if not all.

Meh, I'm going through a broker, my family goes through a broker and a lot of my friends go through brokers. I don't see whats soo bad about going through a broker vs a bank.

If you save money, you save money.

[kkhakh]

l/l/rX,
Your right in saying a broker can do many things like having 30+ lenders at there disposal to get a deal done. I'm advocating brokers as well. I see it as the only way to get a fair market price for your mortgage money. It ensures fair competition rather than going with a bank who assumes you wont shop around.

I applaud you, and ur fam n friends, for using brokers!

I see it as a way to keep the banks honest about rates and terms, in the end most mortgages are backed by the banks anyhow, lets keep them competitive!

[Skyline_Addict]

Whether it's a broker or a retail banker you are dealing with, at the end of the day, I think it's the person you are dealing with that really matters. If you're working with a reputable broker who is good at his/her job and can get you a great rate, I don't see why not. If you love your personal banker at a retail bank and have that established relationship, and he/she can get you a competitive or matched rate, why not?

I agree that brokers can usually edge out the banks as far as rates are concerned, but as mentioned in the thread, people do consider (alot) more factors much more than just the rate. Speaking of relationships (with a banker) however, there is ALOT of movement in retail banking. Your mortgage advisor will have probably moved to a completely different position by the time your mortgage is coming up for renewal.

The compensation structure for each position will obviously cause differing degrees of the way the sales and services are conducted, but in the end you are getting a mortgage somewhere.

Just to be clear, the banks make most of their money off deposits and investments than they do off of lending. Well not directly but rather, being able to lend money is dependent on the deposit books. The more money the bank has, the more it can lend. It is less so in the reverse. Banks basically make money by the spread between interest rates on loans and deposits/investments.

[civicHB]

Just a heads up to all of you who are considering TD mortgages. They are one of the only institutions that compound their interest monthly vs semi-annually like the rest of the industry.

This is not a huge deal but still it is a few dollars a payment and over time it adds up

Bemnet

[A790]

For most people a mortgage broker makes sense. I have referred many people to Todd and Joanne Purcell and have yet to hear anything negative back from anyone. I used Todd Purcell myself when I got my mortgage and Todd took care of everything so I didn't have to.

My bank was able to secure me a rate of 4.25% (this was in June) and Todd was able to lock me in at 3.84%. Over five years that difference will be very noticeable.

At the end of the day, as was stated above, it's about what makes the most sense for you. Regardless, I can see no reason why someone wouldn't at least talk to a broker and see what they bring to the table.

[dezmarez]

Originally posted by civicHB
Just a heads up to all of you who are considering TD mortgages. They are one of the only institutions that compound their interest monthly vs semi-annually like the rest of the industry.

This is not a huge deal but still it is a few dollars a payment and over time it adds up

Bemnet


I think you are mistaken, they are compounded twice per year (semi-annually) but charged monthly.

[boarderfatty]

I personally have had the best experience with my Bank. I have my personal accounts with TD, my trading with Scotia, Business with RBC, and GIC's etc at Servus.

I have been a customer with TD since I was 2 years old. I was 19 when I was looking at purchasing a house. I was told that given my situation I would be best off going with a broker. I went to a broker which said x.xx% was their best rate for a 5 year fixed and that is what I should go with. I checked with 5 brokers all were around the same rate, none gave me many options only what they thought would be in my best interest. (I was 19 putting a 40% down payment, made $120k in the previous year, was looking to make $250k+ that year, and looking to pay off my house within a year or two)

I talked to a TD mobile mortgage specialist who was available to me 24/7 which was convenient since I was working 6-7 days a week upto 18hrs a day. He has been in mortgage sales for 25 years and seemed to have a grasp on what he was talking about. He also explained that being a mortgage specialist that he required the same certifications as a mortgage broker. He also took the time to sit down with me and explain short and long term fixed rates, variable rates and HELOC's. He did not initially give me any interest rates but I took the information back to two of the initial brokers I talked to for their rates on the different products. Again they gave me what they said would be the best rate possible.

I was about ready to sign with 1 broker in a product I found would be suitable for me, not what they said would be suitable. When I went back to the mortgage specialist at TD. He also agreed with my thoughts on a suitable product which was a HELOC. When all the brokers said their best offer was around prime +1% the TD specialist said he would do prime. I took this offer back to the two brokers and they said well they might me able to match but it would be a stretch etc. They had no response when I asked why didn't they offer me a better rate to begin with.

I have since bought 4 properties in 4 years. I paid off 3 right away and sold 1 other I have brought all my business and commission to the original TD specialist because without knowing me he flat out offered the best rate without jacking me around. He provided a hassle free experience which I have not received elsewhere.

Since paying off my homes, I know that TD no longer has the most competative HELOC rates compared to the other Big Banks, but I will continue bringing my home financing needs there for the positive experiences I have had there in the past, and I know that the mortgage specialist I use will work hard for me in the future to get the best products possible.

One of the other brokers might have been willing to work harder for me when I was looking for my 3rd or 4th mortgage. But for being a 19yr old first time home buyer, they weren't giving me the best service possible. First impressions are everything to me and the brokers I dealt with did not give a good first impression or experience which is why I will continue to use TD which gave me the best experience from the get go.

For personal banking I am die hard TD I pay 0 fees for any product I have with them. For business I will continue to use RBC since they have the most competative and suitable product for my business needs, and Scotia iTrade for trading since they have the cheapest fee per trade. I will not be returning to a broker for anything I will need in the future

[dezmarez]

Originally posted by boarderfatty
I personally have had the best experience with my Bank. I have my personal accounts with TD, my trading with Scotia, Business with RBC, and GIC's etc at Servus.

I have been a customer with TD since I was 2 years old. I was 19 when I was looking at purchasing a house. I was told that given my situation I would be best off going with a broker. I went to a broker which said x.xx% was their best rate for a 5 year fixed and that is what I should go with. I checked with 5 brokers all were around the same rate, none gave me many options only what they thought would be in my best interest. (I was 19 putting a 40% down payment, made $120k in the previous year, was looking to make $250k+ that year, and looking to pay off my house within a year or two)

I talked to a TD mobile mortgage specialist who was available to me 24/7 which was convenient since I was working 6-7 days a week upto 18hrs a day. He has been in mortgage sales for 25 years and seemed to have a grasp on what he was talking about. He also explained that being a mortgage specialist that he required the same certifications as a mortgage broker. He also took the time to sit down with me and explain short and long term fixed rates, variable rates and HELOC's. He did not initially give me any interest rates but I took the information back to two of the initial brokers I talked to for their rates on the different products. Again they gave me what they said would be the best rate possible.

I was about ready to sign with 1 broker in a product I found would be suitable for me, not what they said would be suitable. When I went back to the mortgage specialist at TD. He also agreed with my thoughts on a suitable product which was a HELOC. When all the brokers said their best offer was around prime +1% the TD specialist said he would do prime. I took this offer back to the two brokers and they said well they might me able to match but it would be a stretch etc. They had no response when I asked why didn't they offer me a better rate to begin with.

I have since bought 4 properties in 4 years. I paid off 3 right away and sold 1 other I have brought all my business and commission to the original TD specialist because without knowing me he flat out offered the best rate without jacking me around. He provided a hassle free experience which I have not received elsewhere.

Since paying off my homes, I know that TD no longer has the most competative HELOC rates compared to the other Big Banks, but I will continue bringing my home financing needs there for the positive experiences I have had there in the past, and I know that the mortgage specialist I use will work hard for me in the future to get the best products possible.

One of the other brokers might have been willing to work harder for me when I was looking for my 3rd or 4th mortgage. But for being a 19yr old first time home buyer, they weren't giving me the best service possible. First impressions are everything to me and the brokers I dealt with did not give a good first impression or experience which is why I will continue to use TD which gave me the best experience from the get go.

For personal banking I am die hard TD I pay 0 fees for any product I have with them. For business I will continue to use RBC since they have the most competative and suitable product for my business needs, and Scotia iTrade for trading since they have the cheapest fee per trade. I will not be returning to a broker for anything I will need in the future



What kind of work do you do if you don't mind me asking.

[civicHB]

Originally posted by boarderfatty
He also explained that being a mortgage specialist that he required the same certifications as a mortgage broker.

That is incorrect, bank specialists do not get any licencing from the Alberta Mortgage Brokers Association. All they have to know is their bank products so they are not required to take any provincial licencing.

I'm sure you have had a great experience with TD and based on your income and relationship with them it is very likely that they always offer you the best rates. Unfortunately for the average individual this is not the case. Banks are notorious for not offering the best rate, but instead matching what you get elsewhere.

I wish I was one of the brokers you initially dealt with because you would have had a different opinion about mortgage brokers. Hopefully one day I'll get to meet you and prove myself.

bemnet

[l/l/rX]

Originally posted by dezmarez


What kind of work do you do if you don't mind me asking.

He did something something rather on the rigs.
http://forums.beyond.ca/st/234828/how-much-do-you-really-make-in-oil/

Somewhere in there.


Originally posted by civicHB

I'm sure you have had a great experience with TD and based on your income and relationship with them it is very likely that they always offer you the best rates. Unfortunately for the average individual this is not the case. Banks are notorious for not offering the best rate, but instead matching what you get elsewhere.

bemnet


+1 on "notorious for not offering the best rate"

[tpurcell4]

Wow, this is quite the heated topic, and thank you for the kind words A790. Regardless of all the back and forth that has gone on here, the countless examples of good and bad experiences on both sides there are a few things that were left out.

There are great representatives on both sides of the equation, as well as corrupt, or unethical ones. If you were dealing with a broker in the last few years that took the commission and ran, then likely they are no longer in the business, or soon to be on their way out because they do not have a sustainable business model. Those brokers such as myself, CivicHB and many others, pride ourselves on customer service, and rely on referrals and repeat business in order to make a living. Yes, we may earn one, two, three or more thousand dollars to place a mortgage depending on the size, but if we consistently place people in mortgages they cannot afford, or make them feel as if they were ripped off, or misrepresented information to either a client or a lender, our business is done.

I have dealt with and referred business that I cannot get done to representatives at a bank, because there are some deals that even brokers cannot do, but in some cases a bank branch is able to get through, and vice-versa. So this in not just one sided.

Also, as brokers are governed by AMBA and RECA, our jobs are on the line if we misrepresent information to a lender just to push a deal through. The brokers that do alter documents in order to get a deal done, or get a client approved for more money than they can afford are doing so by risking their lively hood. A bank employee or specialist only has to answer to their managers at the bank, and they may lose their job for pushing through a fraudulent application, where if I were to get caught doing such business I would 1) lose my license instantly, 2) ruin my reputation completely, 3) get slapped with a hefty fine and potential jail time for committing fraud!!!!

So my advice to everyone here would be to do a little homework. If you are going to deal with a broker, find out how long they have been brokering? what company do they work for? Is it a reputable company? Ask for testimonials from past clients?

Todd Purcell