We’ve all heard the terms Mortgage Broker and Mortgage Specialist flung around, but what on earth is the difference? Though they sound similar, there are major differences that all home buyers and owners should be aware of. Let’s start off with some simple definitions.
A Mortgage Specialist is a person employed by a lending institution to sell that lender’s mortgage products. A Mortgage Broker belongs to an independent firm that has access to multiple lenders’ mortgage rates and offers. So which one should you choose?
Mortgage Specialists can help if you already have services set-up at a lending institution, such as a bank, in order to consolidate all your finances. This can minimize paperwork as the bank is already familiar with your credit history. If you don’t have all your existing services set-up at one institution, you may choose a lending institution and Mortgage Specialist for the security of using a well-known bank. These are indeed valid reasons to enlist a Mortgage Specialist for your mortgage needs, but they also have some major disadvantages.
Mortgage Specialists only have access to their lender’s products. In a typical situation, homeowners end up with a higher interest rate than other institutions. This occurs because the homeowner must negotiate for themselves and Mortgage Specialists are usually paid according to the rate they sell you. This is where Mortgage Brokers come in handy. Mortgage Brokers have access to most lending institution’s products in the market place and can shop around to negotiate the best rate for you. We do not benefit from selling you a higher rate, sounds great, but what else can a broker do?
Mortgage Brokers work for you rather than a single institution, which means they work in your best interest. A Mortgage Broker will handle all the paper work for you and only require a single credit check for all applications. Some people worry about using Mortgage Brokers because they usually belong to unknown, smaller companies, but this should really be viewed as an advantage. Mortgage Brokers are required to have formal training and must complete ongoing accreditation tests and courses to maintain their licences. Mortgage Specialists do not require any formal training and are simply educated by the institution they work for. These specialists are also limited to certain hours set forth by their employers, whereas Mortgage Brokers are typically available 24/7.
Both avenues of mortgage lending have valid functions. If you are willing to do research and feel comfortable negotiating for yourself then a Mortgage Specialist can be a sound investment option. If, however, you are stressed about the process and don’t feel comfortable taking on the responsibility of researching everything for yourself then a Mortgage Broker is a better option for you. It’s always best to take the time and discover which option fits your needs before jumping into one of the biggest purchases of your life.
So get out there and start researching!
Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca
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