Why Should I Choose an Independent Mortgage Professional?
If you're contemplating purchasing a property or renewing your mortgage and are considering approaching your bank directly, pause for a moment and ask yourself: why should I choose an independent mortgage professional?
1. Banks Have Limited Access to Mortgage Products
At first glance, this point might appear evident; however, the implications may run deeper. When dealing exclusively with a single institution, your mortgage options are constrained to what's available within their product catalog. Essentially, you are bound by their specific qualifications, which often have limited flexibility. This lack of flexibility can pose a significant challenge, especially if your financial circumstances are complex.
In stark contrast, engaging with an independent mortgage professional grants you access to a diverse range of products from over 200 lenders. These lenders encompass banks, monoline lenders, credit unions, finance companies, alternative lenders, institutional B lenders, Mortgage Investment Corporations, and private funds. The broader spectrum of options that an independent mortgage professional can provide significantly enhances your prospects of securing a superior mortgage arrangement tailored to your unique needs.
2. Banks Employ Salespeople, not Mortgage Experts
Contrary to popular perception, banks do not employ mortgage experts; they employ salespeople. The individuals working at banks are primarily incentivized to sell the institution's products, generating profit for the bank. This creates an inherent conflict of interest. The motivation to enhance the bank's profit may clash with advocating for your best interests.
Banks are profit-driven entities, and maximizing their earnings from your transactions takes precedence over safeguarding your financial interests. However, when you opt for an independent mortgage professional, you gain the expertise of an individual well-versed in the intricacies of mortgage financing. This professional works on your behalf to secure the most advantageous mortgage terms. It's a symbiotic relationship, as the mortgage professional is incentivized to align your interests with the best available mortgage terms.
The compensation received by an independent mortgage professional is a standardized finder's fee paid by the lender for orchestrating the financing. Consequently, the lender competes for your business, ensuring that you secure the best possible mortgage. In this scenario, every party involved benefits: you acquire the optimum mortgage, the mortgage professional is compensated fairly, and the lender gains a new borrower.
3. Banks Rarely Offer You Their Best Terms Upfront
Banks, driven by the objective of maximizing profits, seldom present their optimal terms at the onset of negotiations. This holds true especially when you are seeking to refinance your existing mortgage. Surprisingly, a significant portion of individuals in Canada accept the renewal offer mailed by banks without questioning or negotiating. Banks exploit this trust, often failing to extend their most favorable rates and terms.
Conversely, when collaborating with an independent mortgage professional, you sidestep the rate and term negotiations. The primary aim is to identify the lender offering the most suitable mortgage for you right from the initiation of the process. Any negotiations required are adeptly handled by the mortgage professional. The focus remains on securing the best mortgage terms for you, fostering satisfaction and promoting referrals to friends and family.
4. Banks Promote Restrictive Mortgage Products
In addition to withholding their optimal terms, banks tend to promote mortgage products with restrictive clauses. The details concealed within the fine print of your mortgage contract significantly impact your financial commitment. Banks intentionally complicate the understanding of these terms, making it arduous for you to consider leaving their services.
One such restrictive element is the Interest Rate Differential penalty (IRD). Various lenders utilize distinct IRD calculation methods, and chartered banks are notorious for enforcing high IRD penalties. On the contrary, independent mortgage professionals invest the time to comprehend your objectives and assess your mortgage requirements based on your individual circumstances.
The crux of a beneficial mortgage lies in minimizing your overall borrowing costs. An independent mortgage professional meticulously outlines not only the cost of mortgage financing but also comprehensively delineates the expenses associated with prematurely terminating your mortgage before the term concludes. This detailed analysis significantly influences your choice of lender and mortgage product.
So, What Are The Advantages of Collaborating with an Independent Mortgage Professional?
It is pretty obvious that relying solely on banks for mortgage solutions has its limitations. From restricted access to mortgage products and the presence of sales-driven professionals to the lack of upfront transparency in terms and the promotion of restrictive products, the drawbacks are undeniable.
Contrastingly, embracing the guidance of an independent mortgage professional unveils a world of mortgage options, expertise-driven advocacy, transparent and beneficial terms from the outset, and a comprehensive understanding of mortgage costs and penalties. The advantages are manifestly in favor of working with an independent mortgage professional.
Your financial well-being and the optimization of your mortgage terms should be your priority. Empower yourself by choosing an independent mortgage professional to navigate the intricate landscape of mortgage financing. Your choice today could potentially translate into substantial savings and a secure financial future.
How Can We Serve You?
So, if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime with the team at Key Momentum Mortgages Ltd. using the contact info below. It would be a pleasure to work with you and help you along your mortgage journey.
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We're here to help with answers to your mortgage and alternative financing options. We look forward to serving you.
Laura Mackie, AMP | Mortgage Broker
Key Momentum Mortgages Ltd.