(Oct 2, 2023)

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Mortgage rate holds work by allowing applicants to secure a specific interest rate offered by a lender for a predetermined period of time, anywhere from 30 to 120 days. The process begins when you complete a mortgage application directly with a bank, or a mortgage broker.

Should I inquire directly with a Bank, or a Mortgage Broker for a rate hold?

While you have the option to go directly to a bank or work with a mortgage broker, there are several compelling reasons why choosing the latter can be significantly more beneficial:

Access to Multiple Lenders:

Banks typically represent their own suite of mortgage products, limiting your options to what that specific bank can offer. On the other hand, mortgage brokers have access to a wide network of lenders, including banks, credit unions, and alternative lenders. This means they can shop around on your behalf, helping you find the most competitive rates and terms available in the market.

Efficiency and Reduced Credit Inquiries:

When you approach multiple banks directly for mortgage rate quotes, you’re often required to complete separate applications for each one. Each of these applications triggers a credit inquiry, potentially impacting your credit score. However, when working with a mortgage broker, you only need to complete one application, and the broker can then approach multiple lenders with the same application and credit report. This minimizes the number of credit inquiries, preserving your credit score.

Confidentiality:

When banks individually check your credit score, they can see the names of other lenders who have inquired about you. This knowledge can put you at a disadvantage during negotiations, as banks may adjust their offerings based on the competition. Mortgage brokers, however, protect your confidentiality. When they inquire on your behalf, only the brokerage’s name appears as the inquirer on your credit report, not the specific lenders they are contacting. This ensures a level playing field during rate negotiations.

Credit Score Preservation:

Every credit inquiry has the potential to impact your credit score, albeit usually by a small amount. If your credit score is on the borderline between good and fair, even a single additional credit inquiry can make a difference. By working with a mortgage broker and minimizing the number of credit inquiries, you’re safeguarding your credit score and maximizing your chances of securing the most favorable mortgage terms.

SUMMARY:

While both banks and mortgage brokers can help you secure a mortgage rate hold, the advantages of using a mortgage broker are clear. You gain access to a broader range of lenders, streamline the application process, protect your confidentiality, and, crucially, protect your credit score from unnecessary hits. Ultimately, this approach empowers you to make more informed decisions and potentially save money on your mortgage.

Contact Marko, he’s a Mortgage Broker!

604-800-9593 cell/text | Vancouver (Click Here to schedule a call with Marko!)

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Email: gelo.m@mortgagecentre.com

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Qualifying for a mortgage is not rocket science, connect with us and we’ll be done in no time!

reserve a rate hold for up to 120 days
it’s FREE to pre-qualify for a mortgage!
we actually pre-qualify you for a mortgage as though you are really purchasing a home. Most lenders just issue a make belief “mortgage pre-approval” certificate with a rate hold
in order to pre-qualify for a mortgage, your income and credit standing must to be reviewed
our process requires about 7 minutes of your time (usually via a telephone interview)
the amount of detail included in our Mortgage preQualifications are second to none. We’ll include various scenarios of rate offerings and explore all other options pertaining to your particular profile…you will not be disappointed!
mortgage preQualification’s are valid as long as you maintain your employment that you stated during the application interview. Also, no other credit accounts should be attained while you are pre-qualified for a mortgage
all applicants are eligible for a mortgage preQualification: New to Canada, Self Employed, Investors, First Time Home Buyers, 100% commissioned, Part-time income, etc.
a minimum down payment of 5% is required for mortgage eligibility (the entire 5% can be gifted from an immediate family member). For purchases over $500,000, the minimum down payment increases to 10%, but only on the portion over $500,000. For example, for a $600,000 purchase, the minimum down payment would be $35,000.
co-signors are sometimes required to bump up your mortgage qualification amount. We will include a scenario that will give you an idea of how the addition of one would impact your scenario
if you are self employed, all lenders require a two year track record of your business. If you have been self employed for less than two years, exceptions are granted from time to time. More documentation may be required and the minimum down payment can be as high as 25%
one application, one credit check and access to Canada’s TOP lenders!

Tag: rate hold

Mortgage Rate Holds: Bank vs. Mortgage Broker – Why Choosing the Right Path Matters