When somebody is looking to buy a house, they will usually have some money saved up but require a mortgage to cover the rest. What is a mortgage and what's the difference between mortgages from a bank and those from a broker?
What is a Mortgage?
A mortgage is a financial loan provided by a lender. Mortgages are different from other types of loans because they are specifically attached to a property. Mortgage interest rates tend to be a lot lower than traditional loans and are available in much longer terms than other personal loans. Mortgages are completely customizable to work with the individual needs of every home buyer. When it comes to buying a mortgage, there are two directions you can take. First, you can go directly to a lender like a bank or credit union. Or you can check out what alternative options a mortgage broker can offer. So what’s the difference? And which one is best for you?
When you buy a mortgage from the bank, you are buying directly from a lender. A bank will put all your paperwork together and save you the hassle; however, there are a few things to keep in mind. The bank can only offer options provided by their company, this means you are only able to see the rates offered by one location. Many banks offer their direct customers decent discounts, but not without negotiation.
Mortgage brokers may appear similar to banks on the outside, they offer mortgages, don’t they? Actually, not quite… Brokers serve as the middle man between lenders and borrowers. Brokers are not able to lend the money themselves; instead, they shop around, negotiating low rates and high value on behalf of their clients. When you work with a broker for your mortgages, home equity loans, and even second mortgages, you have a number of options from a wide variety of lenders. In addition to the regular banks, mortgage brokers have access to hundreds of private loaners as well. Mortgage brokers are also the best way to obtain a mortgage when you have bad credit. Mortgage brokers like Morgix are able to get everyone approved for a mortgage, home equity loan, and even a second mortgage despite bad credit!
Which is Better?
Which route is better for you will depend on a few different personal conditions. Banks may be able to offer you discounts if all of your services are with them, but the level of savings depends on the individual client, and the institution. If you are buying a home and have bad credit, you may want to look at going through a broker. Mortgage brokers have access to so many different lenders and can advise you based on ample personal experience with each of their lenders. If you are looking for unbiased advice on your mortgage, home equity loan, or second mortgage, a broker is also the path to take. While direct lenders like banks and credit unions may care about their clients, their advice will likely be biased in favour of their lending institution rather than your needs.
Looking to explore your options with a mortgage broker, call Morgix today and get started with your application! Get pre-approved in less than an hour and perceive the funds before the end of the week!