ELI5 why would you go with a bank versus a mortgage broker?

[roopi]

Originally posted by gwill
banks will screw you with higher rates when you renew. They wont give you the same rates a broker automatically starts with.

I absolutely hate the fact one of my mortgages is with a main bank.. always a major #/@$? hassle when renewing.

It's not a hassle at all. When you are up for renewal ask your bank for the best rate they can offer. Then speak with a broker and ask for the best rate they can get you from a major bank. Just provide that to your current bank and they should always match it.

[That.Guy.S30]

Originally posted by gwill
banks will screw you with higher rates when you renew. They wont give you the same rates a broker automatically starts with.

I absolutely hate the fact one of my mortgages is with a main bank.. always a major #/@$? hassle when renewing.

Maybe you should switch banks then. Renewing is just a few signatures. And if you have a good relationship with your bank they actually give a rate or at least in my experience.

[Khyron]

2.5 at TD on a 5 year , 3% on the LOC. Your bank will do better.

[Strider]

Originally posted by gwill
i wouldnt pick a random broker from online. Find someone local who can answer questions down the road.. brokers all have the same rates so why not support the local connection.

Personally, I've found better rates through online brokers than local. It's a very competitive market, many of the brokers are buying down rates and covering legal and appraisal fees using a portion of their commissions.

The whole bank vs broker game is pretty annoying. The last time my mtg was up for renewal, I knew exactly the product and the rate I wanted from a certain bank, but the bank wouldn't give it to me straight up, even though I knew and they knew it was available. I had to jump through hoops getting it from a broker, which means they ended up paying commission to the broker... how does that make any sense? It worked out for me in the end though, because I got the rate I wanted and my legal & appraisal fees covered.

www.ratespy.ca is my preferred comparison site... they list bank and broker rates.

[LadyLuck]

Originally posted by 90_Shelby
I've found True North Mortgage to be one of the cheapest and they have a number of locations downtown. I used them on my last renewal and they had decent prepay options etc.

Rate Supermarket puts them at the cheapest as well.

https://www.ratesupermarket.ca/mortg...amp;rate_hold=

I was very happy with True North Mortg. especially since BMO tried to sell me on 3%, swore up and down that was the best rate and when I got 2.1% from TNM...BMO came back saying they could match it. Thanks but no thanks.

[mzdspd]

When I bought my new build, the builder would waive all lawyer fees if I used a big bank.. So I shopped around with the banks and brokers. I crunched the numbers and It ended up being cheaper to have a slightly higher rate with the bank (.05-.1% difference I believe). But other then that specific case, I would always go with a broker.

[RealJimmyJames]

What the hell is "ELI5" that is in the subject line?

[jwslam]

Originally posted by RealJimmyJames
What the hell is "ELI5" that is in the subject line?

I also googled this
"Explain Like I'm 5"

[RealJimmyJames]

So it's like "school me on" etc?

[Pacman]

Originally posted by Strider


The whole bank vs broker game is pretty annoying. The last time my mtg was up for renewal, I knew exactly the product and the rate I wanted from a certain bank, but the bank wouldn't give it to me straight up, even though I knew and they knew it was available. I had to jump through hoops getting it from a broker, which means they ended up paying commission to the broker... how does that make any sense? It worked out for me in the end though, because I got the rate I wanted and my legal & appraisal fees covered.

This is what I found frustrating as well 8 years ago when I was getting a mortgage.

From what I understand, some of the bigger banks have become "non broker friendly" and are using their own internal agents (probably paid on a salary vs commission) instead of outside brokers.

I think a lot of the brokers are now using monoline lenders vs big banks

[sputnik]

Originally posted by Pacman


This is what I found frustrating as well 8 years ago when I was getting a mortgage.

From what I understand, some of the bigger banks have become "non broker friendly" and are using their own internal agents (probably paid on a salary vs commission) instead of outside brokers.

I think a lot of the brokers are now using monoline lenders vs big banks

Since I bank with TD already I just go with their "Mobile Mortgage Specialists".

http://mms.tdcanadatrust.com/locator_mms/

They usually get me a decent rate which ends up being 10-25 basis points higher that the super restrictive Internet broker rates from some small random lender. However that is fine with me since I like the conditions on the TD fixed rate and its handy banking in one place.

I currently have a 2.59% 5 year fixed with TD. At the time the best broker rates were at 2.45%.

[Pacman]

Originally posted by sputnik



They usually get me a decent rate which ends up being 10-25 basis points higher that the super restrictive Internet broker rates from some small random lender. However that is fine with me since I like the conditions on the TD fixed rate and its handy banking in one place.

Agreed. I always feel more comfortable paying slightly more with a bigger bank for a less restrictive mortgage

[blownz]

Originally posted by roopi


It's not a hassle at all. When you are up for renewal ask your bank for the best rate they can offer. Then speak with a broker and ask for the best rate they can get you from a major bank. Just provide that to your current bank and they should always match it.

I totally agree with this. I have always been at a bank and always done this. The worst the bank ever gave me was 5 points higher which is minor and the bank had better payback options.

On top of that I find the bank is way nicer to you when you have all your products with them. Way more likely they will wave a fee when they are making more money off you. I have renewed my mortgage almost a year early with no penalty, paid off my mortgage early with no penalty and had other perks because of using them exclusively. That said I definitely shop around periodically to keep them honest.

They do joke with me that I am not as good of a client anymore with out a mortgage. lol That is why they keep lowering my HELOC to prime minus .5% to try and encourage me to borrow money.

[triplep]

I would be careful with any mortgage product you get from any of the big banks or any bank. Their mortgages may have restrictions that they typically glaze over and you don't find out about them until renewal time comes.

I think the big one is that some of the low rate mortgages from BMO don't allow you to break your mortgage prior to renewal unless there is a sale of the property. So if you wanted to ever refinance the home good luck.

In addition, another big one is the way they register the mortgage (Collateral Charge Mortgages). Basically, they register it in a way that if you try to ever leave them (even at renewal), you are going to incur significant legal fees etc. This they will for sure never voluntary tell you, and in most cases they will lie about it.

http://www.canadianmortgagetrends.co...chapter-2.html

[zhao]

meh, to those saying that brokers are always cheaper than banks... site your sources...... Because that is not true.

Some lenders do not deal with brokers, and brokers do not deal with all lenders.

On my house I dealt directly with CIBC, which was the cheapest at the time.

On my newest rental unit I dealt with a broker and TD ended up being who we went with from his list of lenders he dealt with.

As others have said too, sometimes the fine print makes a difference why people would pay more.

IF you want the best rate you are going to need to do a lot of leg work yourself and may end up dealing direct with a bank. If you want an ok rate with minimal effort that's what brokers are for.

[ercchry]

Brokers for sure CAN be the cheapest... always variables though... like picking a high volume team with good leverage... plus having them like you enough to buy down your rate

[tonytiger55]

Originally posted by zhao
meh, to those saying that brokers are always cheaper than banks... site your sources...... Because that is not true.

Some lenders do not deal with brokers, and brokers do not deal with all lenders.

On my house I dealt directly with CIBC, which was the cheapest at the time.

On my newest rental unit I dealt with a broker and TD ended up being who we went with from his list of lenders he dealt with.

As others have said too, sometimes the fine print makes a difference why people would pay more.

IF you want the best rate you are going to need to do a lot of leg work yourself and may end up dealing direct with a bank. If you want an ok rate with minimal effort that's what brokers are for.

I would beg to differ. TD may have offered the cheaper rate through the broker. But I doubt they would have given you that rate if you went directly through TD bank.

It also depends on the other variables. First home, second home, whats the overall financial picture? One bank may just want a bread and butter mortgage and don't want to deal with a medium high risk customer profile and may let the brokers deal with that. Other banks may capitalise on that. There are so many variables.
The amount of times clients would say 'at this bank, my friend got this rate etc'. The problem is do you know what your friends financial profile is? (income, debit, savings, asset base, credit score..?).

[gwill]

With my multiple properties my bank would have had all my mortgages but the idiots wouldnt match what the banks in the same plaza would offer.

I ended up with 2 new properties with a broker because my bank was stupid... then on renewal they play the same retarded game of not matching what everyone else would do...

I had closed on the one house when the bank called me asking me about the closing.. they hadnt even read my email informing them i went elsewhere for my mortgage.

While one can blame debt ratio, risk or whatever.. it doesnt change the fact how simple it was to get the best possible rate from a broker with no negotiation, simple one page terms, and easy renewal options.

Worst part was i deal with brokers on a daily basis and could have brought my business anywhere.. stupidest waste of time dealing with my bank. Also in regards to those saying TD is good.. enjoy your collateral mortgages... from my experience they are always notorious for not offering the best rates. For example my work had a luncheon with 4 TD brokers and their main boss one time and they couldnt even explain the collateral mortgage clause they use and the boss wouldnt state why they dont always give the best rates out of the gates.

The second they started using excuses on why they dont have a simple way to quote rates was good enough reason not to send them my referrals. If you want referrals we want to know your looking out after our clients making things easy and quick...

Ugh ?^!#$ the big banks

[C_Dave45]

Originally posted by jwslam

I also googled this
"Explain Like I'm 5"

You can always spot the "Reddit" members here.

[RealJimmyJames]

What is reddit? I could probably also "google search this term" but I prefer not to.