Bank or Broker: What’s the Difference?

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When it’s time to sit down with a mortgage professional, it’s important to understand the difference between what a traditional bank can offer and what an independent mortgage broker can provide. Mortgage brokers have been around for decades. Whereas the big banks only created a mobile mortgage segment in their operations in recent years as a way to better compete with the growing number mortgage originations coming from independent mortgage brokers.

At very first glance, it may seem like MMS’s and Mortgage Brokers do the same thing: they provide mortgage services and are not restricted to regular banking hours – they can can meet with you at a time and place that is most convenient for you. But there are major differences that consumers need to understand. So what’s the difference between a mobile mortgage specialist and an independent mortgage broker?

A lot.

The main difference and perhaps the most important factor to consider is: MMS’s can only offer mortgage products from their particular banking institution, whereas licensed mortgage brokers work with multiple banks and lenders. Mortgage brokers act as the intermediary between the borrower and these lenders, offering all types of mortgage solutions for all kinds of personal and financial scenarios.

Because MMS’s have limited access to what is actually available to the mortgage consumer, borrowers with bruised credit or unconventional employment may find it difficult to arrange their mortgage through a bank. Licensed mortgage specialists not only have access to the big banks that are open to receiving business from brokers, they also work with a variety of non-bank lenders such as credit unions, trust companies, and mortgage investment companies that have niche products and specialized lending programs.

This important difference poses a very important question: can the MMS really work in the highest and best interests of the client if they can’t offer every option available to them? If they are simply selling what their financial institution is offering, how does the client know their mortgage is the best kind of mortgage for them?

Another important difference between an MMS and a licensed mortgage professional is the educational requirements needed to become a mortgage broker. Every broker goes through rigorous aptitude testing as well as a criminal record check, every two years. Brokers in British Columbia are regulated by the Financial Institutions Commission (FICOM). FICOM is responsible for making sure consumers are protected. This is different from the MMS which is an employee of the bank. They do not require testing and are provided training through the banks.

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When it comes time to secure home financing, there’s nothing wrong about talking to a mobile mortgage specialist. But why do the leg work when you can streamline the process? Meeting with a licensed mortgage professional gives you all the information you need about various financing options, all in one – it’s a one stop shop. And if time is money, mortgage brokers save you both time and money.

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