Why Applying For A Mortgage Without The Expertise Of A Mortgage Broker Is A Bad Idea
DIY or do-it-yourself activities are a great test of creativity and an excellent opportunity to overcome economic constraints. They can also be a therapeutic or fun leisure activity. However, as the DIY craze catches on and with more information about different tasks and jobs readily available on the internet, many believe almost any project can be completed swiftly as a DIY, even applying for and successfully getting a mortgage.
Suppose you’re planning on getting a mortgage to buy your first home, refinancing your mortgage, or even looking for debt consolidation. You have much to consider before applying for the mortgage and signing on the dotted line. To give you an idea of how bad things could get for you on your own, Rowan Smith Mortgage Broker - City Wide Mortgage Services, has explained why attempting DIY mortgage solutions is a terrible idea.
1. Your best interest may not be considered or met
When dealing directly with a bank, you are, in essence, dealing with an employee that works for the bank. They have a legal duty to protect the bank’s interests, and they don’t have a fiduciary duty to get you the best offer. On the other hand, mortgage brokers work for you. They have access to multiple mortgage products and can design mortgage solutions to suit your needs and specific circumstances.
2. Risk of higher interest rates
As a broker, you could say we are a “volume discounter,” meaning that we get the banks’ lowest rates because we do very large volumes. A client may get a $500,000 mortgage and think that is a lot of business. As a brokerage, we do over a billion dollars in mortgages and get significant rate discounts because we give the mortgage provider large volumes of business. Hence, using a broker can (often, but not always) get you a lower rate.
Do things right - Hire a professional
In Vancouver, British Columbia, to offer mortgage services, you must be licensed with BCFSA, the regulator, and you need to have your license renewed every two years with continuing education requirements.
Once you have the education, you will need to become very well versed in all the many banks and major lenders’ products. You will also need to be aware of private lending options that could be called upon in specific situations and memorize the procedure and process you should follow.
I suggest you get a broker who knows all the banks’ rules and can best advise you. Not only does a broker know the ins and outs of various mortgage products and where to get the best rates, but they also will look at the long-term planning to see if the product is ideal for you, given your plans. For example, if you might sell within one to two years, you should be taking a different mortgage than someone that intends to live in the home for ten-plus years.
If you are concerned about affording the services of a mortgage agent, I have news for you. While I do work solely for my clients, my services come at no cost, as we are paid a one-time commission by the financial institution that funds your mortgage.
For a reliable mortgage broker in Vancouver, BC, reach out to Rowan Smith Mortgage Broker - City Wide Mortgage Services. I have been in the banking and broking sector for more than two decades and understand how the process works. I work on various types of mortgages and provide my clients with a better understanding of the process they are getting through, so they are informed and can make better decisions.
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