Are you looking to a buy a new home in Pickering and need a
mortgage but don’t know whether to go to the big banks or to mortgage lenders?
This is a dilemma that many first-time home buyers face. What is the difference
in going with a alternative lender versus a bank for your mortgage? Here is a
look at the differences between banks and alternative lenders to help choose
the financer that suits your needs.
Before you go to an alternative lender (through a broker) or
a bank, you should know what your needs are in terms of the type of mortgage,
term, amortization period, interest rate, etc. Based on your long-term goals
and your immediate needs, you should be aware of the monthly payments you can
A bank is a type of mortgage lender. Banks have mortgage
officers that will meet you and review your needs and credit history and talk
about the mortgage that will best fit your needs.
The bank may offer to pay some of the closing costs of a
home or the appraisal fee. If you are already a customer of the bank, they may
offer additional perks such as waiving of banking fees etc. As a consumer, you
may already have a rapport with your bank and know how it is doing in the market.
However, a bank may not be able to offer the best interest
rate. Generally, if you are going to a bank for a mortgage, you will be
negotiating with their mortgage officer. This can be a difficult process since
the mortgage officer works for the bank and not for you. Shopping for mortgage
and the best interest rates with the banks can be daunting since you will be
doing all the legwork. In addition, if your credit
score is not good, you may not be approved by the bank for a mortgage at
Other alternative lenders can be accessed through a mortgage
broker. Mortgage brokers are professional licensed mortgage specialists and
work for a brokerage firm. They are essentially the middleman and work to get
you the best rate from alternative lenders. Mortgage brokers can get paid by you or by the lender once the deal has
closed. Most reputable brokers will not charge upfront fees
A mortgage broker has access to all types of mortgage
lenders, even banks, and negotiate on your behalf. They will shop around with
the lenders to see who can offer the best rate, term, and more based on your
needs and credit score. The mortgage lender that may be offering the best rate
may not be a known name or a big financial institution. This is where you may
need to have an open mind and discuss with your lender or mortgage broker about
the history and stability of the lending company.
Buying a new home and getting a mortgage is one of the
biggest financial decisions of a person’s life. Knowing what your financing
needs are and whom to go to can help getting a mortgage a simpler process.
Prospective homeowners in Pickering can access mortgage lenders through a
brokerage or go to a bank for their mortgage needs. Choose the lender that
offers you the best financial solution for your short-term and long-term goals!