Bank Mortgages vs. a Mortgage Broker
Since I am a professional in Real Estate I would recommend that you require more in-depth information and contact a mortgage specialist who will be better equipped to answer all your questions.
There are two main ways of going about getting a mortgage. The bank will give you a mortgage from them and that is who you would be borrowing the money from. Each bank is different and you will be able to shop around and choose from their products and services to best meet your needs. There will be a mortgage specialist there to help guide you through the process and answer all your questions. However, keep in mind that they are employees of the bank and therefor will receive a specific salary - they may be helping you, but they recieve their paycheque from the bank they work for.
A mortgage broker essentially does the same thing however they will locate you the best possible mortgage for your needs by shopping through hundreds of different banks and lenders. Once they find the right product with the best rate, they will go through all the paperwork and explain the process similar to the bank’s mortgage broker. However, most brokers do not collect a salary and instead will get paid a commission from the lender who they shopped the mortgage from. They work for you.
Personally, I find that brokers seem to have more at their disposal in finding you the most suited mortgage, but no matter what institution you are going to borrow your money from it is important to feel comfortable and trust that they have your best interests in mind. You will be dealing with them for a while so if you are more comfortable with one or the other let that be the basis for where you start your search.
There are many types of mortgages so it is vital that you do your research so you know what type of mortgage you are looking for and what will be the best for your particular circumstance. If you are buying a long-term property you may want to look at a long-term mortgage – these usually have higher initial interest rates but could be very comforting several years down the road when/if the rates go up yet you wouldn’t have to worry. Now, if you are looking at a short-term property, such is the case when flipping a house, where you would only be there for five years or less, you may want to consider a variable mortgage. These usually have a lower interest rate, however it does fluctuate in response to the Bank of Canada rate so be prepared for fluctuating payments.
Overall, all mortgages have specific features that are part of their package – think of your mortgage as a new car where you shop around for the best deal for your needs, realizing that added features will increase the overall cost. With mortgages the cost is built into the rate, and some options are available as a pre-payment option which would allow you to pay more to the principle of your mortgage on an annual basis. It is therefore important to let you mortgage professional know what your future plans may be as it will help them determine the best mortgage for you.