Personal Finance

Mortgage Brokers - Better than the banks?

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  • Dec 30th, 2007 11:28 pm
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[OP]
Newbie
Oct 28, 2006
34 posts

Mortgage Brokers - Better than the banks?

I was wondering if anyone here has any recommendations regarding mortgage brokers? Are they really better than the big banks? The few that I've checked out only seem to offer closed mortgages...is this the norm? Is there a "master website" that compares the brokers? Any suggestions? Thanks ;)
21 replies
Deal Fanatic
Jul 1, 2007
8206 posts
1108 upvotes
A good mortgage broker can offer you better service than the banks AND better rates. The vast majority though only offer better rates. If you want a combination of service, rate and still bank at your primary institution, I'd recommend getting a rate offer from a broker and then bringing it to your bank to match.
Jr. Member
Dec 5, 2007
154 posts
Ontario
Thalo wrote:
Dec 28th, 2007 6:26 pm
A good mortgage broker can offer you better service than the banks AND better rates. The vast majority though only offer better rates. If you want a combination of service, rate and still bank at your primary institution, I'd recommend getting a rate offer from a broker and then bringing it to your bank to match.
Nice.

I'm not a mortgage broker....and apparently you aren't either. Nothing like encouraging people to walk all over brokers!

If I go to my bank and ask them for their best rate, they offer it, then I ask a broker to spend his/her time doing the application to get me their best rate, I'll be damned if I'm going to stoop so low as to take the broker's better rate back to my bank to meet it.

I refuse to waste a person's time like that!
Deal Addict
Aug 7, 2003
2844 posts
25 upvotes
Tedder wrote:
Dec 28th, 2007 7:04 pm
Nice.

I'm not a mortgage broker....and apparently you aren't either. Nothing like encouraging people to walk all over brokers!

If I go to my bank and ask them for their best rate, they offer it, then I ask a broker to spend his/her time doing the application to get me their best rate, I'll be damned if I'm going to stoop so low as to take the broker's better rate back to my bank to meet it.

I refuse to waste a person's time like that!
why are you on RFD?
Jr. Member
Dec 5, 2007
154 posts
Ontario
fl4wless wrote:
Dec 28th, 2007 7:11 pm
why are you on RFD?
most threads on RFD aren't about walking all over a person's livelihood...that one hit a nerve.
Deal Expert
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Sep 19, 2004
22532 posts
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Waterloo
You don't necessarily have to waste a broker's time or use a broker
You can call, and ask politely, what the lowest rate they've provided recently, they will of course say it varies on the applicant, but no matter

You take that X% and ask your bank to match it
If not, then you proceed with the broker

Bank can ALWAYS match the best rate, if you go prepared
It's just annoying that they don't offer it up front
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Jr. Member
Dec 5, 2007
154 posts
Ontario
jerryhung wrote:
Dec 28th, 2007 7:21 pm
You don't necessarily have to waste a broker's time or use a broker
You can call, and ask politely, what the lowest rate they've provided recently, they will of course say it varies on the applicant, but no matter

You take that X% and ask your bank to match it
If not, then you proceed with the broker

Bank can ALWAYS match the best rate, if you go prepared
It's just annoying that they don't offer it up front
great way to put it...much better than the suggestion of getting the rate offer. To me, an "offer" means you have been qualified for a rate. Qualification would require more work than simply reading off your best rates to "qualified" applicants.
Deal Fanatic
Jul 1, 2007
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Tedder wrote:
Dec 28th, 2007 7:04 pm
Nice.

I'm not a mortgage broker....and apparently you aren't either. Nothing like encouraging people to walk all over brokers!

If I go to my bank and ask them for their best rate, they offer it, then I ask a broker to spend his/her time doing the application to get me their best rate, I'll be damned if I'm going to stoop so low as to take the broker's better rate back to my bank to meet it.

I refuse to waste a person's time like that!

They make enough money.

Besides, it goes the other way too. I used to do mortgages at a bank. There were times when I spent time to go over mortgage options with customers, did the pre-app, locked in a good rate, only to have the customers go through a broker who in turn referred them back to us to sign the mortgage docs. Really bad business for the bank when not only do we waste our time on the prospective clients, but also to have to pay a referral fee to a broker who basically did nothing for them other than offering a better rate.
Deal Fanatic
Jul 1, 2007
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Tedder wrote:
Dec 28th, 2007 7:25 pm
great way to put it...much better than the suggestion of getting the rate offer. To me, an "offer" means you have been qualified for a rate. Qualification would require more work than simply reading off your best rates to "qualified" applicants.
That's what I originally meant. Bank would need something on paper, usually, to match a rate. Nothing against wasting a mortgage broker's time though.
Deal Addict
Jan 11, 2004
4886 posts
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Victoria
Thalo wrote:
Dec 28th, 2007 8:19 pm
They make enough money.

Besides, it goes the other way too. I used to do mortgages at a bank. There were times when I spent time to go over mortgage options with customers, did the pre-app, locked in a good rate, only to have the customers go through a broker who in turn referred them back to us to sign the mortgage docs. Really bad business for the bank when not only do we waste our time on the prospective clients, but also to have to pay a referral fee to a broker who basically did nothing for them other than offering a better rate.
The bank could of course just avoid the hassle and offer the best rate possible all the time and put the brokers out of business. But they won't and so they should be prepared to waste their time giving quotes when people are shopping around.
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Deal Addict
Aug 7, 2003
2844 posts
25 upvotes
Tedder wrote:
Dec 28th, 2007 7:19 pm
most threads on RFD aren't about walking all over a person's livelihood...that one hit a nerve.
Even though Thalo's response seems harsh, the reality is people like to stay with financial institutions they are familiar with. I wouldnt do what he suggested, as i have a really good relationship with my financial advisor. If my mortgage is up for renewal or im transferring or obtaining a new one, id certainly ask him for the best rate he can offer. Before accepting, id do my own due diligence and perhaps see if another bank or a broker could offer a better rate. If i find a better rate, i feel i owe it to my financial advisor to see if he can match it, since ive always done business with him. If he cant the broker or whoever would likely get my business. Simple as that.
Sr. Member
Jul 23, 2003
829 posts
4 upvotes
Lindsay
In my experience you can save some time by printing up ING fixed rates off their website and take it to your bank..they will likely match it...I do this for my clients all of the time and I have no trouble matching it as it is an advertised rate..I have rarely seen any broker beat the rate...variable rates are quite different as there are many many options out there....prime minus .75 is pretty standard.
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Sr. Member
May 27, 2007
853 posts
10 upvotes
Etobicoke
johnsa wrote:
Dec 28th, 2007 9:09 pm
In my experience you can save some time by printing up ING fixed rates off their website and take it to your bank..they will likely match it...I do this for my clients all of the time and I have no trouble matching it as it is an advertised rate..I have rarely seen any broker beat the rate...variable rates are quite different as there are many many options out there....prime minus .75 is pretty standard.
agreed. I will match ING rates on the spot. I dont even waste my clients time, I offer them what ING is offering of the bat. I'm not going to sit there and go back and forth on the rate... ING rates are very competitive for the most part and I find that my clients appreciate me giving them the best rate I can right off the bat. I'm looking for more of their business than just their mortgage, so it makes no sense to me to put them through the hassle of negotiating when at the end of the day, we're still gonna arrive at my best rate.
Deal Expert
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Sep 19, 2004
22532 posts
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Waterloo
Most of the time, brokers AND banks can BEAT ING's rates
Kudos to ING for offering competitive rates up front though

It's the same as FS/BB, why don't they always offer the "best/lowest" prices to the consumers? Because they can, and they need the "spread" to make profit, same as any banks or broker - profit from the "spread" between borrowed money % and lent out money %
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Jul 1, 2007
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I'll tell you exactly what the business model is between bank-customer and bank-broker.

Bank-customer: The customer is coming to the bank, so make as much profit as possible. Likely already a franchised customer, so start at posted (around 7.5ish% now I think) minus something and go from there. Do whatever it takes to get them to sign. So, if a customer thinks 6.5% is a great rate, perfect. If they come up with a competitive offer for 5.9%, do whatever it takes to match.

Bank-broker: Offer best rate possible to get the broker to refer business and potential franchiseable customers. Pay the broker big $$$ for referral.

The big banks usually get the eventual mortgage, so you might as well see if they'll match a broker's offer in order to save them the $$$ for referral.

What pissed me off, as I mentioned before, was when the customer didn't give us a chance to negotiate a rate. They'd go straight to a broker, sign with them, get referred back to us. Or they'd get their mortgage renewal statement with all the posted (super-high) rates and would call brokers or competitors before they called us.

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