Three Reasons You Will Get a Better Rate Through a Mortgage Broker
While it is generally understood that you can get better rates by using a Mortgage Broker, not everyone knows why?
Here are 3 reasons you will get better rates by using a Mortgage Broker. (There are more)
- Unpublished Rates
- We get to shop for you
- Banks will compete (This one is unique)
- Unpublished Rates:
Most banks will lend out mortgage money through 2 different channels.
- One is through the Mortgage Broker channel
- One is through their local Branch’s
Your local bank will finance mortgages at “Retail” rates, you can find these rates online.
Brokers get what is commonly called “Unpublished” rates. Only Mortgage Brokers can get these rates.
And here is why.
Banks typically have a certain amount of money that they can put out into mortgages every month, but if there is a month when the bank has extra money (I wish I had that problem!) then they want to get that money out onto mortgages, to earn them interest.
Lowering the interest rate is the fastest way for a bank to get their money out into mortgages, BUT they don’t want to lower their rates to everyone. If they did that, they would make less interest (Think “profits”)
So instead of lowering their mortgage rates for everyone, they put out a request through the Mortgage Channel that give us an “Unpublished Rate”.
With an unpublished rate Brokers only have a limited time to close a mortgage, usually around 60 to 90 days. Contact us anytime for more information on this.
- We get to shop for you:
There are literally dozens of banks give mortgages
For any one person to go from Bank to Bank would not only take a crazy amount of their time but each bank would be pulling your credit bureau, and that would be detrimental to your credit score.
Mortgage Brokers already know what each bank offers, and when we do a credit check, that is the only credit check that needs to be made. The banks will use our credit check, so you don’t have to have dozens of hits on your credit bureau.
- Banks will compete:
This works exceptionally well if your mortgage is coming up for renewal.
When your mortgage comes up for a renewal, the bank will send you a “renewal letter” with the renewal terms and interest rate.
Tell us what that rate is and we will shop around to see if it is a fair deal or not. If we can find you a better rate, take it back to your bank and let them know that we found you a better rate.
They can either, beat that rate. In which case you will win or they won’t be able to beat our rate and in that case we will get you that mortgage and you still win.
Win / Win. There is no downside for you in this case. But if the bank does end up lowering their rate because of our work, please let you friends know that we were there to help you. And we will also help them when the time comes.
And for the “More” reasons please feel free to contact us anytime.
