BANKS VS MORTGAGE BROKERS

3 WAYS BANKS (AND SOME BROKERS) FAIL CONSUMERS WHEN SEEKING A MORTGAGE:

Each year customers come to us at Mortgage Architects and ask us why they should come to our office as opposed to the bank. They ask us to compare Banks vs Mortgage Brokers. This is an excellent and fair question. As both a former banker and a current mortgage broker, we are glad to answer the questions since it is a major decision and we are very familiar with the comparison of Banks vs Mortgage Brokers. Many mortgage brokers will not tell you this but realistically, in some cases, you are better off with your neighbourhood bank. We hope that this article will help you learn some of the deficiencies that the banks and inexperienced brokers have in preparing our valued clients when seeking a preapproved mortgage. We believe in education of the process so that you can view the pros and cons in an honest and transparent way.

1. Have them prepare a budget

When weighing Banks vs Mortgage Brokers, ask your mortgage broker to prepare a budget. After examining our clients income very carefully, we have them look at a budget as to what home ownership will be like. Why you may ask? Most first-time buyers have never had house bills such as property taxes, home insurance, and in some cases even utilities. It is said buying a home is the most expensive item you will ever have. It is really important that these buyers will have a realistic picture of what life will be. This picture should be a happy one.

2. Prepare a basic plan or philosophy

Let’s face it, your life changes when you buy a home, however we seem to forget the most basic parameters when getting your mortgage.

a) Your relationship, marriage, partner, or family, is the most important factor in life.

You or your mate should still be happy and enjoy what makes you smile. This could be golfing, the theater, travelling or whatever. Just because you buy a house does not mean you want to miss out on life. Quite frankly, if your relationship does not work, all the planning is useless. Be selfish and worry about your interest. This philosophy is what distinguishes between Banks vs Mortgage Brokers.

b) Have a plan to pay yourself

Nothing goes wrong when you have cash in the bank. When you have cash, you have options. Sadly, most Canadians are living paycheque to paycheque and it is affecting not only their lifestyles but their stress level and health as well.

c) Worry about the mortgage last.

This may sound counterintuitive but a mortgage is meant to be paid over 25 to 30 years. The key to a mortgage is years. If possible, every year increase the payments by $50-$75 per month. This will drop the number of years you pay the mortgage off.

Banks do not explain these factors. In fact they will be hoping you fall behind so they can sell more credit problems which is another disadvantage of Banks vs Mortgage Brokers.

Please put a plan together with a) + b) and c) will take care of itself!

3. What else do you require before you buy a home?

This is another poor job most banks and some brokers do when looking at a potential client. They do the basics of looking at your credit, your down payment and your income before they spit out a preapproval and let you go on your way. This is unfortunately a real disservice.

When considering Banks vs Mortgage Brokers, consider that our responsibility is to ask these valued mortgage clients more pertinent questions and thoughts.

These include the following:

Do you have sufficient funds for the lawyer?
Do you have funds for a lawnmower, appliances, pots, pans and everything else a home needs?
Are you considering children (the price of day care today is very high)?
How old is your vehicle?
Do you have an emergency fund in case of a major renovation?

These questions above have affected us all. Let’s do a better job of helping our customers have a great life. We are the experts and we should be sharing this life important information.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

If you would like to apply for a mortgage online, please follow this link.

If you would like to see our Google reviews or leave one yourself, you can do so here.

Thanks for reading!