Getting a mortgage thru a consultant versus directly thru a bank
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As a borrower, what are the benefits or pros/cons of getting a mortgage through a mortgage consultant versus through a bank.
I have got a pre-approval thru a consultant for ING. I am also a ING Bank's savings account customer, so what's the benefit of me getting the mortgage thru the consultant (except that he is making a good commission), if the bank will give me the same rate.
I have been comparing the pre-payment options and other features as looks like pretty much every bank is ready to give the same rate as say ING, when you tell them what ING is offering, so rate is not a differentiater.
I intially went to the mortage consultant for pre-approval, as I did not want 5-6 banks separately running a credit check, if I went to each of them and hence having a negative affect on my credit history.
But I have no faith that the mortgage consultant can be impartial and get me the best deal, as they will always recommend the bank that gives them the best commission.
Sorry, if this was already discussed, I search on this topic, but did not find any posts.
I can share my experience (and it is very recent). I went thru mortgage consultant, the individual gave me rates being best offered by different banks. Then I consulted another one and he provided me the similar rates that first one offered. So I decided to go thru the first gentleman. When my application was approved, what I got was list of conditions such as I will have to pay all credit cards bills (though I never carry balance). I need to pay my unsecured line of credit before the disbursements. I need to close my "unutilized" RRSP Catch up line of credit.
I called my bank and told them I want to go other bank for mortage. They gave me same rate plus as appreciation to get the mortgage from them, they waived my bank and safety deposit fee for five years.
MY ADVICE WILL BE: (1) If you have established relationship with your bank you should talk to them. (2) If you are planning to approach different banks to get the best rate DO NOT DO THAT" then go thru a mortgage broker.
I prefer using a mortgage broker personally. They have established relationships at banks and other lenders and they tend to negotiate a lower rate for as opposed to you walking into any random bank.
As the previous reply stated: "If you have established relationship with your bank you should talk to them." That is true. Approach them first and see what kind of rate they can give you. If they are not too flexible, then I would suggest going through an experienced mortgage broker.
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Vimal Patel, Realtor
Homelife Royalcorp Real Estate Inc., Brokerage
Cell: 416-887-3745
Office: 905-856-6611
Fax: 905-856-6232
vimal.patel@gmail.com
http://www.vimalpatel.ca" rel="nofollow">LINK
Location: carl sagan's universe
Posted on: 21-12-06 17:35:46
Quote:
Originally posted by navin2004
As a borrower, what are the benefits or pros/cons of getting a mortgage through a mortgage consultant versus through a bank.
I have got a pre-approval thru a consultant for ING. I am also a ING Bank's savings account customer, so what's the benefit of me getting the mortgage thru the consultant (except that he is making a good commission), if the bank will give me the same rate.
I have been comparing the pre-payment options and other features as looks like pretty much every bank is ready to give the same rate as say ING, when you tell them what ING is offering, so rate is not a differentiater.
I intially went to the mortage consultant for pre-approval, as I did not want 5-6 banks separately running a credit check, if I went to each of them and hence having a negative affect on my credit history.
But I have no faith that the mortgage consultant can be impartial and get me the best deal, as they will always recommend the bank that gives them the best commission.
Sorry, if this was already discussed, I search on this topic, but did not find any posts.
All major banks give the same commission. It is only the trust cos and other B or C lenders that vary in commissions.
If your credit is good, say a beacon score of above 680, you can demand your terms within reason. My score was over 700 when I went shopping and I asked every bank if my score is over 700 what will be your terms. They of course said they will pull my bureau no matter what, but they themselves came back and said if it is over 680, we can give you this, this, this (including free locker services like one of our previous posters). I got my mortgage thru a bank with stupendous terms, 'cos when they did pull my bureau it was over 700, all R1s and also my TDSR was within the limit.
I have since become a mortgage consultant but usually do cases where clients have been refused by banks, or I know will be refused by a bank if they go directly due TDSR, R3s, low beacon score. I never pull a credit bureau but instead recommend to the client that they ask for it themselves, then coach them accordingly, though some with excellent credit end up going through me anyway, because of certain financial techniques and other value-added services I can offer. For instance, the bank never told me about taking an RRSP loan and putting in $20,000 and then withdrawing it 90 days later, the benefits of which are many.
All depends on your mind set who you want to approach really. There is a definite shift towards brokers for several reasons. The numbers speak for themselves, unless you think the numbers are cooked up.
Quote:
Originally posted by investpro
All major banks give the same commission. It is only the trust cos and other B or C lenders that vary in commissions.
If your credit is good, say a beacon score of above 680, you can demand your terms within reason. My score was over 700 when I went shopping and I asked every bank if my score is over 700 what will be your terms. They of course said they will pull my bureau no matter what, but they themselves came back and said if it is over 680, we can give you this, this, this (including free locker services like one of our previous posters). I got my mortgage thru a bank with stupendous terms, 'cos when they did pull my bureau it was over 700, all R1s and also my TDSR was within the limit.
I have since become a mortgage consultant but usually do cases where clients have been refused by banks, or I know will be refused by a bank if they go directly due TDSR, R3s, low beacon score. I never pull a credit bureau but instead recommend to the client that they ask for it themselves, then coach them accordingly, though some with excellent credit end up going through me anyway, because of certain financial techniques and other value-added services I can offer. For instance, the bank never told me about taking an RRSP loan and putting in $20,000 and then withdrawing it 90 days later, the benefits of which are many.
All depends on your mind set who you want to approach really. There is a definite shift towards brokers for several reasons. The numbers speak for themselves, unless you think the numbers are cooked up.
OK, not sure what all the acronyms R1s, TDSR's mean. If you are talking about the Gross Debt Ratio, I am within the 40% limit.
I do have a beacon score of 775, which is pretty good when the max is 800. I have no credit card balances and have a good job. So I am in good seat to negotiate. The part about getting an RRSP loan, I don't get that. I already know that you can borrow upto 20k from your RRSP and return it back periodically within certain number of years. I do not have a big RRSP, so I am not thinking of doing that.
Can you suggest what are the terms that one can negotiate, apart from waiving the fee on locker(the point being I don't have one right now) etc.
BMO got close to beating ING rate, but then added conditions that I open a chequing account with them, the fee for which they will waive for 6 months, plus I move my direct deposit to them.
I currently bank with PC Choice, so I don't have much to negotiate with them, as they do not have some of the traditional services that a typical brick and mortar branch has(ex: locker)
Quote:
Originally posted by Desi # 1
I can share my experience (and it is very recent). I went thru mortgage consultant, the individual gave me rates being best offered by different banks. Then I consulted another one and he provided me the similar rates that first one offered. So I decided to go thru the first gentleman. When my application was approved, what I got was list of conditions such as I will have to pay all credit cards bills (though I never carry balance). I need to pay my unsecured line of credit before the disbursements. I need to close my "unutilized" RRSP Catch up line of credit.
I called my bank and told them I want to go other bank for mortage. They gave me same rate plus as appreciation to get the mortgage from them, they waived my bank and safety deposit fee for five years.
MY ADVICE WILL BE: (1) If you have established relationship with your bank you should talk to them. (2) If you are planning to approach different banks to get the best rate DO NOT DO THAT" then go thru a mortgage broker.
Desi 1,
If you don't mind me asking, what was the bank you went with ? My closing is on 1st Mar next year, so I am guessing I need to have the mortgage app completed 2 weeks prior. Once mortgage consultant I talked to was ready to beat the other consultans/ING rate, if I went with another bank, but was also advising I go with a variable rate for 1 year, as he was expecting the interest rates to drop by Jan 2007. I told him that is fine, as I don't need the mortage until Jan anyway, so I can wait and see who gives me best rate at that time.
I see that negotiating and getting incentives, works well with brick and mortar banks versus virtual banks like PC Choice.
Just for your reference, a purchase I just recently completed for a client of mine got a 5 year fixed rate from his mortgage broker for 5.05%.
-----------------------------------------------------------------
Vimal Patel, Realtor
Homelife Royalcorp Real Estate Inc., Brokerage
Cell: 416-887-3745
Office: 905-856-6611
Fax: 905-856-6232
vimal.patel@gmail.com
http://www.vimalpatel.ca" rel="nofollow">LINK
