According to ‘Moolala’ author Bruce Sellery who was recently on the ‘Lang & O’Leary Exchange’ TV program, “Going back to your bank for a mortgage, primarily because you’ve been a customer ‘Forever’ is “Zombie Behaviour”. “A lot of people would say it’s loyalty. I would say it’s lazy” he added. Sellery offered his guidance on picking your next mortgage originator and said “Mortgage Brokers work for you, versus the bank mortgage specialist who works for the bank and offers only bank products and rates.”
“You can be loyal to a restaurant you love because they treat you right, but don’t be loyal to your bank because you like the person there” or you feel you will get a better deal because you have been a good customer. He went on to say “It can make a profound difference in the rate you pay.”
Moreover Sellery knows that ‘Bank reps/specialists rarely highlight their product’s negatives vis a vis the competition, because they have to push ‘one brand’ (their banks’ brand) to make a living’. Reactions from our industry on ‘Canada Mortgage Trends’ web site, echoed Sellery. One said “Is there anyone that still doesn’t know NOT to take a bank’s first offer? The sales games banks play are straight out of a car dealer’s playbook.”
Even if you negotiate with your bank, how do you know (when you are not an expert) if there is a better rate out there. Folks that’s where we come in. We give you the best rate, PERIOD, end of story, the first time every time AND at no cost to you OAC, on approved credit.
Equally as important, is for you to get ‘Objective, Unbiased Advice’ that is in your best interests that will save you thousands, sometimes tens of thousands of dollars. This is where our service becomes invaluable in addition to rate.
We had a new client come in the other day. She and her husband split up and she told us that her bank would not let her out of a loan that they both co-signed for. The bank kept renewing her mortgage every six months at a high rate (above 6%) despite the fact she never missed a payment and despite the fact that they knew she has worked for minimum wage for years and was struggling. The bank did not tell her that she needed to improve her credit score so she could get a better rate. So there she was year after year paying mostly interest and not reducing principal. Fortunately she had good equity in her house, so we are getting her a short term second mortgage to pay out the loan and her first mortgage reducing her total monthly outlay by $500/mth and we are coaching her improve her credit as quickly as possible, so she can qualify for a low rate prime institutional mortgage.
Why didn’t the bank come up with a similar solution or at the very least give her a much lower rate to her get ahead. They know she earns minimum wage, yet they kept taking as much as they could from her. The answer is that they just do not care, and bank reps are training to maximize bank profits.
So should there really be any question who the best mortgage source is? I often scratch my head when I think that if Canadians really understood the benefits of using a top notch mortgage broker versus the banks, that our market share would not be at 25%, it would be at 75% which is the market share the banks still enjoy. People have the power and you can change this dynamic in your favour.