Have you ever wondered how to pay a mortgage broker? There’s this misconception that you personally pay a mortgage broker when you work with one, but I’m here to tell you the truth!
In this article, I’ll share with you how to pay a mortgage broker, what’s the difference between a broker and a bank and what I recommend you do when you’re in the process of purchasing a home.
What’s the difference between a broker and a bank?
When people are going through the home buying process, they often think that they have to go through a bank to get a mortgage. But, that’s not really the case. You can either go through a bank or through a mortgage broker.
When you work with a mortgage broker, it’s going to be a different experience than when you work with a mortgage specialist at a bank.
Let me explain.
The main difference is that at a bank you’d be working with a mortgage specialist. This person doesn’t have to have a mortgage license. They also only represent the products their financial institution offers.
When you work with a broker, like myself, you’d be working with a mortgage broker. A broker has to receive their license and renew it every two years. In addition to being licenced, a broker has access to several of the main financial institutions plus many other broker specific lenders. This means that I am able to shop around the different banks to find the best rate and product possible for you.
If you were to use a mortgage specialist at a bank, they only have access to their institution’s rates and are not able to shop around for the best rates coming from other banks.
If you want to learn more about broker vs bank, you can check out my article “Broker vs Bank – Who to Choose.”
Should you use a broker or the bank?
There isn’t a one size fits all answer to this question. I think there are some situations where it makes sense to work with a bank that you’ve been working with for many years. But, I truly believe you should reach out to a mortgage broker first to see. Together we can see what rates your bank is offering you and what better rates I’m able to secure.
When people reach out to me, I am working for them. When people reach out to the bank, the mortgage specialist works for the bank. This means that I have your best interest in mind when searching for the best rate for you, and oftentimes, the bank has the bank’s best interest in mind over the client.
When I have a client inquire with mortgage questions, immediately, I am working for them. I am learning about their situation, what the person is looking to purchase, their debts and how I can make it happen for them. As a broker, I am able to reach out to different lenders to find the best possible rate and guide my client to what I think is the best plan for their future purchase.
I believe that working with a mortgage broker provides people more options, more information and a better customer service experience.
How do you pay a mortgage broker?
Now that you understand the difference between a mortgage broker and the bank, you’re probably wondering how you pay a mortgage broker if you decide to go down that route.
The simple answer is you don’t!
When you work with a mortgage broker, you don’t have to worry about paying one. People think because a mortgage broker works privately that they need to pay them a fee. But, that isn’t the case at all.
When you work with a mortgage broker, you don’t pay anything. The bank that your mortgage loan comes out of pays the mortgage broker for bringing them the client. There are no fees that come from you and it isn’t taken out of your mortgage either.
The payment to the mortgage broker is completely separate from your mortgage.
I’m here to help.
Building a relationship and meeting in person can be important to some clients. That is one of the main reasons people reach out to their bank for a mortgage in the first place. However, the good news is that my business is just as accessible. I have an office in downtown Kelowna where we can meet in person to go over your files and situation.