Refinancing Your Home - Broker Vs Bank

Bank Vs Broker

Mortgage Broker Pros:

- Linked up with several banks and most of the times may offer a better rate than the average bank
- Bound to disclose all fees to borrowers (including what the bank is paying them on whatever rate they have sold borrower on).
- Now, in most country, most of the brokers are licensed. So the borrowers can rely on them to get advice or service. The fees they can demand is regulated by the government or regulatory body.

Bank Pros:

- Rates set, no "selling" on their end. Rate is what it is.
- Dealing with one institution instead of having to deal with a go between.
- Process is much more smooth and easy. Additional charges like brokers fees not involved.

Cons:

Mortgage Brokers

- Typically commissioned employees whose income depends on a sale. Thus higher rates might typically be sold.
- Usually given a minimum fees requirement by management where they are unable to down sell rate as much as they should be able to.
- Process not as streamlined, no control over banks turn times, etc
- Do not have final say when it comes to ultimately deciding on a loan (appeal process is not easy)

Banks

- Do not have to mention or clarify all fees
- If working for a federally licensed bank, employees does not have to be licensed to sell mortgages (lack of knowledge, expertise in industry could be questioned).


View Bank Refinance for more details.