When it comes to mortgage shopping, you may not know where to look. Do you visit your trusted bank and see what they have to offer? Or, do you sit down with a mortgage broker to find out what they can do?

Then and Now

Depending on who you talk to, the bank is the only way to go. In the past, people would rely solely on their banks to get them the best rate and a mortgage package that seemed to suit their needs. Today, however, things have changed. Now, mortgage brokers can deliver not only the best rate but get you a mortgage package that doesn’t seem to suit your needs, it actually does suit your needs.

If you’re looking for your first home and have never worked with a broker before, you may not be familiar with their services.

Why Use a Broker?

Mortgage brokers are adept at finding you the perfect mortgage package because they live, sleep, eat, and breathe mortgages. They are licensed specialists who have multiple lenders at their disposal. What they do is act as a negotiator on your behalf and basically haggle to get you the best rate. A mortgage broker is an intermediary who essentially does the dirty work of finding you the finest rate so you can sit back and relax during the process.

Using the services of a mortgage broker over those of your bank has many advantages:

• Brokers are adept at finding mortgages for everyone, no matter what your financial situation is, whereas a bank may be less welcoming to those that are self-employed or have poor credit.
• A mortgage broker has access to a variety of lenders and will find one that fits your exact situation. Brokers craft relationships with different lenders so that whatever your monetary condition may be, they can find a lender to match.
• Mortgage brokers often have exclusive deals at their fingertips that the banks cannot access because these deals are not available on the open market.
• Working with a mortgage broker is also favorable because they can oftentimes negotiate lower application fees from the lender, especially since they’ve already established a relationship.
• Any discounts the broker finds are passed down to you directly because they are working for you, not against you. They want you to have the best rate. If they didn’t, they would’ve gone into another profession where customer satisfaction is irrelevant. Mortgage brokers aren’t in sales. They’re not trying to sell you the perfect rate; they’re trying to find it for you.

To sum up the benefits of dealing directly with a mortgage broker here are the pros:

• They do all the legwork for you.
• Working with them saves you time.
• They can find mortgage packages for just about anyone, no matter what your credit score is.

Unfortunately, there are cons that go along with every pro:

• Brokers do get paid a commission by the lending institution; so technically, they are not working for free. If they’ve had a slow month they may try to get you into a mortgage just so they can receive their commission.
• The lenders they find for people with bad credit may not be top-tier lenders
• If you’re a first-time homebuyer you may not have an existing relationship with a broker like the one you have one with your bank.

Save Your Bank for Banking

Your bank can only offer you their own products, while a broker can present a variety of options from various lenders. This is not to say that your bank is bad and you shouldn’t go there ever again. But, when it comes to home buying and mortgages, you want to keep all doors (and windows!) open to ensure you get exactly what you need.

As I mentioned before: In the past, whenever someone wanted to buy a home they would most probably approach a well known bank for availing a mortgage. Times have changed and now you have various options for getting a mortgage. Once such famous solution other than banks is a mortgage broker.

When you look for a mortgage, you’ll obviously look for something which is trusted and has less interest rates. Both banks and brokers have their own ties ups and individual licenses for their functioning. Other than banks and brokers there are other mortgage solutions like trust companies and credit unions.

Its upto you to decide which one to go for.

Not all mortgage brokers are good or bad, and it’s the same with banks. With brokers you’ll have the benefit of a consistent service because it will just be a single person and their team compared to a large bank with lots of employees. If you ask me, I would say you go for brokers if you’re shopping for a loan and make sure that you compare the rates.

This is a guest post by Eric. He works as a blogger and outreach coordinator for a mortgage broker in Toronto. He’s a graduate from York University, Ontario, and loves all thing science, sports, tech and movies.