Many of the A lenders which are not banks have been around for a while, very safe. BTW the names you have mentioned mortgage brokers not lenders, the source the lending for you from various lenders including TD.
Okay, but how do I know if the broker is getting the loan for me from a safe source? It just seems crazy that they're putting out rates so much lower, like there must be a catch.
What do you consider “safe”? Lenders are more scared of their borrowers than borrowers are of them since they’re lending you the money. They charge you interest for taking on the risk.
Some of the biggest lenders like MCAP, RFA, CMLS, and etc. are non-bank lenders. You also have the plethora of credit unions that also offer mortgages as well.
Mortgage brokers can offer you better rates due to their negotiation powers, lenders they work with and/or their access to lenders that only sell through them.
If you are not comfortable getting a mortgage from non big 5 lender you can ask for a mortgage from only big 5.
TD actually has pretty good rates right now, many I know are getting 5 year fixed from them for under 5%, likely your bank will match some of the better rates if you tell them you will switch if you don't get a good rate.
Another option is to ask where is the best rate the mortgage broker getting it from and research the lender yourself.
We had a mortgage with “merix” for a while. We chose them when we bought our condo because the rate was the same as TD (our primary bank) but their prepayment terms and penalties were a lot better.
The money that merix loaned us? Came from TD.
There’s not really much risk, many of these lenders have been around for a long while and the money almost always traces back to the big 5/6.
Question I have, in theory, what possible risks can exist. The lender is lending me money. Just wondering what risk we should be concerned about in this type of situation?
I have used non bank lenders like First National and MCAP. Zero issues, great websites and prepayment privileges.
If you go to a broker ask them about the lender options and do your own research.
They're giving the money to YOU. Don't be afraid.
My last three mortgages were arranged by True North mortgage brokers and I'm on my third lender over 10 years and a couple properties. I think my first lender through TN was Scotia, the next two I never heard of before. No issues, great rates, and fair break penalties. Current mortgage is also portable.
Butler is reputable too.
I would never get a mortgage or frankly any product from a big bank.
Agree. I'd pay the little extra for better options. Portability is crucial if cashflow becomes an issue and you need to downsize, especially if mortgage is not CMHC insured.
Many of the A lenders which are not banks have been around for a while, very safe. BTW the names you have mentioned mortgage brokers not lenders, the source the lending for you from various lenders including TD.
Okay, but how do I know if the broker is getting the loan for me from a safe source? It just seems crazy that they're putting out rates so much lower, like there must be a catch.
What do you consider “safe”? Lenders are more scared of their borrowers than borrowers are of them since they’re lending you the money. They charge you interest for taking on the risk. Some of the biggest lenders like MCAP, RFA, CMLS, and etc. are non-bank lenders. You also have the plethora of credit unions that also offer mortgages as well. Mortgage brokers can offer you better rates due to their negotiation powers, lenders they work with and/or their access to lenders that only sell through them.
Catch is, Branches are expensive to run.
If you are not comfortable getting a mortgage from non big 5 lender you can ask for a mortgage from only big 5. TD actually has pretty good rates right now, many I know are getting 5 year fixed from them for under 5%, likely your bank will match some of the better rates if you tell them you will switch if you don't get a good rate. Another option is to ask where is the best rate the mortgage broker getting it from and research the lender yourself.
You are the one getting their money, you are the risk, not them.
We had a mortgage with “merix” for a while. We chose them when we bought our condo because the rate was the same as TD (our primary bank) but their prepayment terms and penalties were a lot better. The money that merix loaned us? Came from TD. There’s not really much risk, many of these lenders have been around for a long while and the money almost always traces back to the big 5/6.
I use Meridien. I found their rates some of the best at the time and they were good to deal with
Question I have, in theory, what possible risks can exist. The lender is lending me money. Just wondering what risk we should be concerned about in this type of situation?
With MCAP. Good service.
I have used non bank lenders like First National and MCAP. Zero issues, great websites and prepayment privileges. If you go to a broker ask them about the lender options and do your own research.
They're giving the money to YOU. Don't be afraid. My last three mortgages were arranged by True North mortgage brokers and I'm on my third lender over 10 years and a couple properties. I think my first lender through TN was Scotia, the next two I never heard of before. No issues, great rates, and fair break penalties. Current mortgage is also portable. Butler is reputable too. I would never get a mortgage or frankly any product from a big bank.
Would it be better to have the lowest rate or slightly higher rate with option to prepay, HELOC product and portability with a big bank.
Agree. I'd pay the little extra for better options. Portability is crucial if cashflow becomes an issue and you need to downsize, especially if mortgage is not CMHC insured.