The little secret is out: there are just 5 main banks in Canada. On the other hand, there are more than 70 lenders who can render you a variety of loans. So, if you're interested in bank mortgage Canada, look beyond the official banks.
The good news is that through lenders you can get more competitive rates as compared to many major banks like RBC, BMO, CIBC, Scotia, and TD. Canadian brokers are a smart lot. They access lenders with just a few clicks, thus, getting a chance to research rates, services, and products.
For a common person, it'd be a tedious task to research all 70 lenders for getting a suitable bank mortgage Canada. If you contact a broker, you can get your work done in a few hours. This is because the brokers have online access to all the important information with regards to mortgage, its types, the current rates, and the procedure involved. This can save you a lot of expenses, time, and energy that would otherwise have been spent in scanning those 70 lenders.
There are various types of bank mortgage Canada - reverse, zero down, fixed rates, variable rates, open, closed, and interest-only. In open mortgage, you can pay the entire amount or a portion of the mortgage at any time. There are no fines for paying before time. Such mortgage generally has tenure of 6 to 12 months. However, their interest rates are higher.
Closed mortgages have undergone a shift in the recent years. Earlier, you could not pay before time. Today, there is certain flexibility in such mortgages. Many lenders provide prepayment alternatives, which allow you to pay your loan earlier.
The most popular choice in mortgages is fixed rate. Your interest rate gets locked up. Such mortgages can stretch for as long as 35 years. The interest rate is a bit lower than that of open mortgages.
If you want an alternative to the conventional bank mortgage Canada, opt for home equity line of credit. You get to fix your monthly payments and can access a portion of the appraised value of your home. As your mortgage balance reduces, your line of credit goes up.
Banks V/S Brokers:
Banks usually provide around 5-6 products and rates, which include Fix rates, New to Canada, Open mortgages, Closed mortgages, Variable Rate mortgages, and No Income mortgages. On the other hand, the 70 lenders offer around 10-15 products. This is to keep pace with the stiff competition prevalent in the mortgaging market. But, not all products are suitable for all clients. There are conditions and criteria attached to each product. You cannot simply ask a product and get it. You need to fulfill the set criteria to be eligible for the products. Brokers can give you sound advice on what product is best for you.
Now, not all brokers are saintly enough to give you genuine advice on bank mortgage Canada. Some of them do not believe in making the efforts in researching thoroughly about the intricacies involved in mortgaging. They hurriedly provide solutions and take their money. Therefore, it's important to choose the broker with care. You must never pick a strange name. Always go for brokers who are well known for their reliability, knowledge, and way of dealing with clients.
There is software that provides speedy and accurate information on bank mortgage Canada. Besides, another advantage of taking the service of private lender is that you can contact them with a hope of getting a loan even with bad credit. These lenders are willing to take the risk, although they might charge more. But, banks simply refuse to give loans as soon as they learn that you're a bad credit holder. In addition to this, there are many lenders that provide free services. You cannot expect a bank to do this.
Irrespective of your credit score, the lenders assist their clients eagerly and help them save dollars. This, in turn, develops good and long-lasting bond between the lenders and their clients. It's a win-win situation. The lenders build a strong clientele and increase their referrals. On the other hand, the client, that means you, get bank mortgage Canada with ease.