A mortgage is a special type of loan in which the real estate that is purchased can be taken and sold by the lender if the mortgage holder fails to repay the loan as agreed upon. Historically, only banks lent mortgages but there are now many types of financial institutions that will do so. The increased options for mortgage loans have created the profession of the mortgage broker.
The advantage of applying for a mortgage with a bank or credit union is that it may count in the client’s favour if he or she already has a relationship with the lender through a chequing and savings accounts. This held more weight in the past when personal relationships with a banker were more important. The downside is that the bank’s Ottawa mortgages officer can only access mortgage types that the specific bank offers. A bank or credit union’s mortgage officer works for the bank, not the client, and lacks the options that a mortgage broker has. If mortgage seekers are refused at the bank and go to another bank, each subsequent credit check negatively impacts their credit history.
A mortgage broker has access to all the mortgage products available. The mortgage broker works for the loan seeker, not the lender. Usually, a mortgage broker can get a better rate for a client, especially when credit history is less than ideal, or the income/debt ratio is on the high side. Ottawa small business owners will usually find it easer to get a mortgage by going through an Ottawa mortgage broker, rather than a single lender. Another bonus to working with a mortgage broker is that the client’s credit history is only checked once (each check counts as negative points), no matter how many banks and other lending institutions the mortgage broker approaches while trying to find the best interest rates and terms