So, now that you’ve decided to take out a home
equity loan in Burlington or other nearby township; you’ll need to make an
appointment with a secured loan professional; will it be a mortgage broker or a
While both are viable alternatives, each has
specific benefits that will favour what’s most important to you. Here’s an
overview that will help you choose the best mortgage professional for your
Benefits of a Mortgage broker
According to the Canadian
Association of Accredited Mortgage Professionals (CAAMP), mortgage brokers
represent about 40% of all total mortgage originations in Canada, and that
trend is continuing upward.
For your home equity loan or home equity line of credit (HELOC)
refinancing needs, you’ll want to consider an independent mortgage professional
before going straight to your local bank; because a broker provides you a number
of invaluable services (in most cases) for free.
Most home owners appreciate that a mortgage broker will shop the mortgage
interest rate market for them, assuring diligence that they just wouldn’t have
time to complete on their own. The broker’s function is to provide an auction
type marketplace, where lenders vie for your business and bid at their lowest interest
rate possible; for the second mortgage
term you’re considering.
This pseudo marketplace, will include chartered banks, smaller tier-2
lenders, and if required private lenders. Often times, a mortgage broker will
secure your first mortgage, second mortgage, home equity loan, or home equity
line of credit
below what you would have received on your own; because of the negotiating
leverage their accumulated business provides.
Unless you have ‘top shelf’ credit, you’ll likely want an independent
mortgage professional scouring the market to find the best combination of
approval level, low rate, and strength of the institution. Because they deal
with many institutions, their experience in matching your unique situation,
with the appropriate lender, is well worth consideration on its own.
Benefits of Using a Bank Lender
Your neighbourhood bank can provide you with a secure option
for your mortgage or home equity financing needs, as long as your credit meets
their standards. Banks provide you with the same lending packages that your
independent mortgage professional negotiates, however you may also receive
preferential savings, investment and deposit perks if you have other services
at the same institution. Be sure to use this pooled negotiation leverage if you
decide to take this direct financing route.
While bankers used to have set hours, most will now equal
the flexibility of an independent professional; meeting around your schedule
and location if necessary.
The banks have become more competitive with the rise of the
independent market, sometimes covering your appraisal fees or some of the
closing costs to complete the deal.
Follow Your Instincts
Regardless of which option you
choose, remember the funds for your loan are coming primarily from the same
place; deposits and investments made by people just like you. A financial
institution, not a mortgage broker, will provide and service your loan, and
collect payments after the closing.
Weigh your options carefully, and remember
to follow your instincts; you’ll likely be dealing with the person and the facilitating
company for many years to follow for your home equity loan in Burlington.