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Think Beyond the Bank: Why You Might Want to Pass on the Traditional Mortgage Route

Posted On Wednesday, 12 April 2023 20:12
Think Beyond the Bank: Why You Might Want to Pass on the Traditional Mortgage Route

Home buying: is there anything more exciting or terrifying? There’s so much to think about when it comes to purchasing a home, but most people immediately assume that they’ll be working with a bank when they secure a loan. However, you may not be aware that banks aren’t always your best option. There are numerous reasons why you may choose to go a different route, such as working with a trusted mortgage broker; these are only a few of the downsides of working with a bank for your mortgage. 

There’s only a few options at any given bank, and some may not be the best fit for your needs

Banks usually offer a limited range of mortgage products, which means you may not get the best deal available in the market. You may be better off working with a mortgage broker who can offer you a wider range of options and help you find the best deal for your specific needs.

What they provide may not even be the best option for you: a bank will likely push their own products even if they don’t truly meet your needs. Mortgage brokers and non-bank lenders may not have the same conflicts of interest and may be able to offer you more objective advice.

High interest rates and stricter lending requirements push people out of the marketplace

Banks are in the business of making money, and they often charge higher interest rates than other lenders. This can mean paying thousands of dollars more over the life of your mortgage. By shopping around and comparing rates, you may be able to find a lower interest rate from a non-bank lender.

In addition, banks have strict lending requirements, which can make it difficult for some people to qualify for a mortgage. This is especially true for those with less-than-perfect credit or those who are self-employed. Non-bank lenders may be more flexible in their lending requirements and may be able to offer you a mortgage even if you don’t meet the strict criteria of a bank.

Slow processing times and hidden fees make it frustrating to work with banks

Banks are notorious for their slow processing times. It can take weeks or even months to get a mortgage approved and funded; this can be frustrating, especially if you’re trying to close on a home quickly. In contrast, mortgage brokers can get your paperwork done at lightning-fast speed, as this is their bread and butter rather than just one product that they offer. A reputable lender like District Lending may be able to process your application much faster, allowing you to close sooner than you ever dreamed you could.

This isn’t the only problem you’ll run into when it comes to banks: they’re not just slower, but also sneakier with their hidden fees. Banks often charge hidden fees that can add up quickly; these fees can include origination fees, processing fees, application fees, and more. Mortgage brokers are more transparent about their fees, allowing you to compare costs and choose the best option for your needs.

Big banks depersonalize you and don’t consider your specific needs

Banks are often large institutions that treat their customers as just another number. You may not get the personalized service you need or deserve when working with a bank. By working with a mortgage broker or a smaller, non-bank lender, you may be able to get more personalized service and attention.

This extends to the way that they do business, which is with limited accessibilities. Banks are renowned for having strict work hours and less locations, which can make it difficult to schedule appointments or get the help you need. However, mortgage brokers are available day and night, with online self-serve options that allow you to submit your paperwork whenever is most convenient for you. They also offer chat and phone options beyond the typical 9-5 of a bank, which is perfect for those with a busy schedule. 

Many banks haven’t truly caught up to the times

Banks are often slow to adapt to changing technologies and trends in the mortgage industry. This can mean missing out on new products or services that could benefit you as a borrower. Innovative mortgage brokers offer new, cutting-edge products that could save you money or make the mortgage process easier.

In this modern era, everyone knows that the best companies are those which offer flexibility and customization - something banks are reluctant to accept. Because banks aren’t as flexible as non-bank lenders when it comes to customizing mortgage products, you may miss out on opportunities to save money or get a mortgage that exactly suits you. However, mortgage brokers may be more flexible and willing to work with you to create a custom mortgage product that meets your needs.

Final thoughts

In conclusion, while banks may be a convenient option for securing a mortgage, they may not always be the best option. By exploring other options, such as mortgage brokers or non-bank lenders, you may be able to find a better deal, faster processing times, and more personalized service.

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