Bank or Brokerage and why?

If you are still undecided on whether you should deal with your bank or a mortgage broker, here is a short summary of what some compelling truths are, around this subject.

A mortgage broker acts as a MEDIATOR or a representative between you, the applicant, and the bank.  

Here are some straight-forward questions to ask yourself, about your financing:

a) what if something goes wrong?

b) who will represent you?

c) will you be able to navigate through escalation channels to get something done?

d) will you be able to successfully negotiate what you want on your own?

e) what if the lender says no?

f) how easy will it be for you to get the deal you want from another bank and on your own?

You may be asking, so how does a broker mediate between the client and the bank?

It is easy to quickly assess that any individual’s business, is truly like a small rain-drop in an ocean to a bank but not so with a broker’s office.   Were you aware that Mortgage Brokerage offices generate enormous volumes of business for lenders (millions of dollars) and therefore with this huge purchasing power, comes privilege.  

If for example, an office has 50 representatives, who are actively carrying on in the business of dealing in mortgages.  Lets say that each representative has placed 2 million dollars of mortgage business with a particular lender.  The brokerage now has a combined volume of 100 million dollars of business with that particular lender.  Now that kind of business volume will make anyone sit up and pay attention, agree?  And so lenders pay attention to us.  Essentially, the high volumes of mortgage business that a brokerage sends to a lender, secures some very important benefits for the applicants who come to us, instead of their bank, looking for mortgage financing:

1) the lender may now pass along additional mortgage rate discounts to those brokerages who have reached a particular sales volume;

2) a large brokerage will immediately receive dedicated focus and attention from individual lenders, for example, dedicated underwriters.  A dedicated underwriter means that a submitted mortgage deal is reviewed quickly and that could translate to your application receiving an approval on the same day!  

3) access to senior levels of management.   Lenders work hard to provide excellent service and particular attention is often assigned to those brokerages that send large volumes of financing business.  Along with this service, lenders will also allow brokerages to access senior management when necessary.  Applications for financing can and do get declined from time to time, by underwriters, based on very specific guidelines under which they operate.  A skilled brokerage can sometimes assist a client in obtaining certain exceptions when management can be accessed to review and assess the application above the approval level of an underwriter.

This post was written by Elizabeth Blair on January 15, 2010, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients primarily in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    www.missmortgage.ca 

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office::   15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

Comments

[Randy Robinson]

The major benefit of having a mortgage broker is the area-specific services. When doing transactions through a bank alone, you will have to endure long, hectic and potentially-unproductive meetings in a disheartening environment. The role of a mortgage broker is to alleviate everything and allow for smoother transactions.