Which Mortgage Lender is the Best?

One of the most important decisions you’ll have to make before applying for a mortgage is the type of lender you want to work with.

When talking about lender types, almost all Canadians are familiar with Banks, but there are other types of lenders out there. For example, Credit Unions and Monoline Lenders could be great options as well, depending on what you’re looking for.

Let’s look at the differences between banks, credit unions, and monoline lenders, and how one of our Mortgage Specialists will help you pick the best one for you.

1. Banks

Pretty much everyone is familiar with the banks. You can find bank branches on almost every corner. If you prefer a more traditional lender, banks could be a good option; however, they can come at a cost.

Operating bank branches not only cost a lot of money, but also, you may not be getting the best mortgage rates if you walk-into a Bank yourself. If you want to access the best rates working with a Mortgage Broker would be your best option.

Banks could be a good option if you prefer to work with a name that you recognize. However, keep in mind that you may be paying for it through the highest rates and higher penalties. Is it worth it? Only you can decide.

2. Credit Unions

Credit unions are a lot like the banks, except on a smaller, more local scale. Credit unions tend to operate in towns and cities in certain regions of the province.

The ownership structures of credit unions are a bit different from banks. Unlike banks which are owned by shareholders, credit unions are owned by their members. Because of this, it’s a credit union obligation to serve its members. This means providing products, including mortgages, which better serve its members.

Credit unions do have their limitations though. A lot of the time credit unions won’t lend to you unless you live within a certain number of kilometres of a branch.

Likewise, since a lot of credit unions operate in only one province, if you end up having to move outside your home province later on, you may not be able to take your mortgage with you and may end up having to pay a penalty.

3. Monolites

A monoline lender is a lender that provides one type of financing – mortgages. Monoline lenders do not try to cross-sell you on other financial products, such as RRSPs, TFSAs, or credit lines. They don’t even offer these products.

You may not have heard of many of the names of monoline lenders. That’s because monoline lenders offer mortgages exclusively through mortgage brokers. You won’t see the names of monoline lenders on billboards or hockey arenas like the big banks. However, due to the lower overhead costs, monoline lenders can offer competitive mortgage rates, often lower than the banks.

Monoline lenders are often referred to as “fairer penalty lenders” as your mortgage penalty there in many cases may be a lot lower versus a bank or credit union.

You may be a bit hesitant to get your mortgage through a monoline lender that you’ve never heard of. Something that may put your mind at ease is that monoline lenders source their funds from the big banks in many cases. You may be receiving money from the big banks without even realizing it.

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Save yourself unnecessary headaches! By choosing one of our Mortgage Specialist, you will have access to multiple lenders and mortgage rates, and they will be able to negotiate the lowest rate for you.

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