Before I speak to clients these days they have already gone to their bank and spoke to a representative about their mortgage. It is a good thing to go speak to somebody at your local bank but I’m here to tell you that your bank may not always have your best interests at hand. While many banks at times will have the best rates, usually at any given point another lender has the best rate in town.
I’m not getting paid by a mortgage broker, but I always tell my clients to get a second opinion from one. I’m not biased against banks, I used to work at one, but if you could save a few hundred dollars a month through another institution, why not?
Simply put, your bank can only give you the best rate that they can offer. A mortgage broker can go to 50 lenders or more and get the best rate for you. Sometimes a lender will give the broker a further discount because of volume mortgages. Now I know some banks will match prices but usually that is through the back end, through a broker who deals with the bank or after you tell them you can get a better rate.
Another key fact is that if you are having trouble getting approved a mortgage broker can also use private funds, depending on the broker and their connections.
In the end it only makes sense to get a second opinion and speak to a mortgage broker. A few hundred dollars a month saved for a year can mean thousands you can lump into your principal and pay down your mortgage faster. Just because your bank is open on Sundays doesn’t mean you should pay more on the other side of your transactions.