Your mortgage broker will help you choose the best lender from which to get your mortgage, but it’s important to make sure that you are aware of all the details when making your choice.
 
There are several types of lenders that can help you finance your home and each has different benefits. If you want help choosing the best mortgage or mortgage provider for you, we have a free service here that can help you make your choice.
 
 
Bank mortgages
Getting a mortgage with one of the big banks may seem like the easiest solution – there are branches on most main streets, you can drop in to see a mortgage professional when you visit town, they can do your other day-to-day banking and many homebuyers feel safer when using one (although most alternative lenders are just as safe).
 
The downside of using a bank, however, is that you may not get as good a rate or overall package – and let’s face it, they’re not going to tell you if a competing mortgage lender has better interest rates or lower fees.
 
You may also find that it is tougher to get a mortgage approval from the big banks if you don’t fit their perfect credit model – having bad credit history or being self-employed, for example, could be enough to prevent these types of lenders from being an option for you.
 
We have a mortgage search tool that compares mortgage rates if you want to do your own research.
 
 
Monolines
One of your many options for a mortgage is a lender who isn’t, strictly speaking, a bank. These lenders also don’t have a suite of other services that they want to sell you – all they do is home mortgages or one line of credit (hence, monoline). They don’t have storefronts, so they save costs that way, but are still regulated by the government so you’re protected.
 
Mortgages from monolines have a number of advantages for some borrowers. Many monolines have great interest rates and may also have lower early exit fees than the banks; this means that if you want to pay off your mortgage early, sell your house or otherwise change your mortgage you could end up with a considerable saving.
 
Monolines will often also provide mortgages when the big banks won’t. If you’re self-employed, a property investor, you want to buy through a company or you’re just a regular borrower then a monoline might be the perfect option for you.
 
To find out whether a monoline is right for your mortgage, you’ll need to go to a mortgage broker to access them – your bank won’t tell you about them (even though banks like RBC actually fund their own monolines under different brand names).
 
 
Alt-A mortgage lenders
If you don’t fit the “perfect” model required by many lenders, there are a number of non-bank lenders who might be able to help you buy your home or real estate investment. Alt-A lenders are a lot like banks but they specialize mainly in the mortgage space rather than in full retail banking facilities. They can provide you with a mortgage, but they won’t give you a checking account with overdraft facilities.
 
One of the reasons that we think it’s wise to use a good mortgage broker is that they will have a good understanding of the pros and cons of each mortgage lender, as well as being able to help you compare mortgages to get the best rate and features package. Check with your friends for a referral or you can use our mortgage broker search to find a recommended mortgage professional.
 
 
Hard or private money lenders
Sometimes it may be that your circumstances are just too tricky to get a mainstream mortgage. Maybe you need the money fast to get that bargain investment property, or your credit history is too short, or one of a dozen other potential reasons. This is when it’s worth considering a hard money or private money lender.
 
Private lenders might be a wealthy person who just lends to people for mortgage purposes or a business that has a number of wealthy investors who pool funds to lend to people wanting to buy a home or invest in real estate.
 
The positives about this kind of mortgage are that approvals can often be fast and that ‘difficult’ cases are more likely to be able to get funds. The downsides are that interest rates are almost certain to be higher and the mortgage term shorter.
 
It’s worth talking to a good mortgage broker to explore your options and find out why this kind of mortgage might suit you, or might not work for you at all. We have a mortgage broker search tool that allows you to find someone in your neighbourhood.
 

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate


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