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Differences Between Mortgage Brokers and Mortgage Bankers

15 October, 2011 / by marketing

When first applying for a mortgage, you might find that there are mortgage brokers and there are bankers. But what about when you merge the two, and get a mortgage banker? What is a mortgage banker, and how do they differ from mortgage brokers?
Mortgage bankers generally work for a certain bank, such as TD Canada Trust or RBC. Their offices are generally located right inside the same building as the bank, although they may work for a specialized department of the bank, such as CIBC Mortgages Inc. The most important thing to understand about mortgage bankers is that they do work for that bank and that bank alone. Because of that, it may be harder to qualify for a mortgage, their mortgage rates might be a bit higher, and you might still have to do quite a bit of shopping around on your own, in order to get the best deal on your mortgage.
A mortgage broker, on the other hand, is vastly different in that they work for tens – sometimes hundreds – of different lenders. Mortgage brokers don’t push any one specific product, and can shop around to all the different lenders for you. You’ll still get the best deal, without traveling from one lender to another to get it. Mortgage brokers also often specialize in things such as bad-credit and low down payment mortgages, something unheard of when choosing a mortgage banker to handle your mortgage.
Mortgage bankers once held a very slight advantage over mortgage brokers in that loan applications were processed quicker, because everything was usually done in the same building; and the fact that customers who had an existing relationship with their bank often received discounts for their loyalty. However, with banks busier than ever, customers unfortunately have gone back to being just numbers, and no rewards are given for loyalty. In fact, a recent study has recently found that banks are most likely to give discounts to new customers, rather than their existing ones.
And, with online processes and email communications, getting a loan through a mortgage broker moves just as quickly as choosing a mortgage banker. When trying to choose between a mortgage banker and a mortgage broker, the question really comes down to whether or not you want to choose a mortgage broker or a bank. And 9 times out of 10, using a mortgage broker is going to get you a better deal on your mortgage, and even more convenience!

          

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