Banks are chartered banking institutions which offer a wide variety of finance services such as personal saving, credit cards and loans. Mortgage is just one of the services they offer. About 60% of homeowners in Canada patronize banks, as they have already built pre-existing and stable relationships with their banks, consolidating all other services already hooked into individual bank accounts. Banks will help you out with the necessary paperwork with ease. One downside is that banks can only offer their own products and services.

Mortgage Broker

The remaining 40% of homeowners choose mortgage brokers. Mortgage brokers are licensed professionals who have access to other lenders and mortgage products under their portfolio. They can then offer you the lowest rates as well as discounts as they acquire mortgage products by bulk. They are not the lenders themselves per se, but the serves as the middleman between the buyer and the lenders. They search for the best mortgage rates and discounts lenders are willing to pass to you and present you with the product options available. The only setback is that new homebuyers do not have pre-existing relationships with mortgage brokers compared to the confidence in dealing with banks.

How does a Mortgage Broker help you?

It is important to understand that mortgage brokers do not fund mortgages themselves. They will offer you different mortgage products and deals to choose from. You will be endorsed to the lender who provides the product. You then transact with the  financial lender, with the broker helping you prepare the documents. They will earn a commission from the lenders they connect you with.

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