Bank Representative or Mortgage Broker?

A Bank Representative is employed by a single financial institution and is promoting that institution’s mortgage products.

A Mortgage Broker is licensed by the Province of BC and can offer the products of many different institutions including Banks, Credit Unions and Mortgage Companies. Brokers attempt to match the clients’ circumstances with the best options available from the full spectrum of lenders.

What’s a Virtual Bank?

It’s a term that has been coined to describe Mortgage Companies that do not have large public branch networks. They are Canadian Companies or Banks that may have Canadian ownership (like Canadian Western Bank) or international ownership (like ING Direct). These companies have lower overhead than many Banks and pass on the savings in the form of lower interest rates.

Mortgage Brokers often recommend these institutions to their clients to help them save money. These lenders often offer better prepayment options and lower penalties than the Banks while still providing full portability. Clients are offered the choice of one of these lenders or one of the large traditional Banks.

Some of these non-traditional lenders have been operating in Canada for 20 years or more, and have more mortgages under administration than many branch-based financial institutions. Many of these companies raise the money they lend by using the Canada Mortgage Bond program. This means that the lender pays to protect the mortgage with an insurer like CMHC. This provides an extra level of protection that isn’t always present with the large Canadian Banks.

The best advices when looking for a mortgage … carefully examine all the choices available. Meet with a mortgage professional and compare the features of mortgages offered by several different institutions. You shop carefully for your daily household needs. Shop even more carefully for your mortgage!

For more information about the benefits of working with a mortgage broker, or to meet for private consultation to assess your needs please contact Liz  Prins at Liz@MortgageCanada.com or visit www.mortgagesbyliz.ca