Kelowna Mortgage

Why Use A Banker?

In Canada, 5 federally chartered banks dominate the financial industry. They account for 80% of the mortgage market, the balance being made up of various credit unions, and nonbank lenders like pension funds, life insurance companies, etc.
The banks themselves, by Canadian standards, are gigantic entities, the size of, and in many cases larger than, provincial governments. The banks are the second most active lobbyists in Ottawa.
I’m telling you this to set some background. The banks are huge and bureaucratic. They have sophisticated systems in place to manage giant fund portfolios and are well run well-regulated players in the financial industry.  A Kelowna Mortgage is no different.
When you meet with a bank employee you can be confident that they have some basic training in the product you’re after and that you will typically be treated in a fair and professional manner. Lets face it, they are good at what they do, hence the 80% market share.
So all is good and there really is no need to talk to an independent mortgage broker then is there?
The key to that answer is to understand that the friendly well-trained bank representative sitting across from you is an employee of the bank. Employees work for their employer, not you.

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Their job is to maximize profit for the bank. Their annual bonus, career advancement and all the rest of being good employees depend upon their performance in creating profit for the bank. They have volume targets, spread targets, cross sell targets, the list goes on. The bank is a demanding task manager and they work for the bank.
So that is a key distinction between a broker versus an employee.
The mortgage broker is paid either by you or the lender to get you sorted out with the best possible
product for you. Maybe you don’t fit in with the standard bank product lineup, maybe you’re self-employed, a new immigrant, or a small businessperson. All of these people don’t really fit well with bank products and when they go the bank are not likely to fare well.
The broker in most cases is a gatekeeper, and is under strict disclosure rules. If you want to know how much we make on your deal ask. Typically we make about 1% payable only if you deal with us.
You can use our quote and take it to your banker, the one that quoted you a higher rate before we got involved, and they will match that rate, not beat it, match it. But what does that tell you? They weren’t up front with you at the beginning of the process (because they don’t work for your interests). So you tell me, why would you deal with a bank?

Kelowna Mortgage