Brandon Nishi | Mortgage Broker
Monolenders vs Big Banks
Big banks are well known, have numerous locations, and offer thousands of different products. You've probably visited one before and you see them advertised on the streets, radio and online. Everyone is comfortable with a place they've seen and been before. But because of this familiarity, clients tend to gravitate to these banks without considering monolenders that can offer better rates, programs, and terms.
Monolenders keep the interest rate competitive. The main attraction to monolenders is the low interest rates they offer. Monolenders also have a variety of programs that'll accept a wide range of customers that the typical bank wouldn't accept. For example, self-employed workers are considered 'higher risk' due to the inconsistent income. Many monolenders will have programs that'll easily accept these applicants because they see them as customers that have potential growth in their business. Monolenders often have better pre-payment options and flexibility with your mortgage.
Whats a Monolender?
MonoLine lenders offer a single line of financial service: Mortgages. Monoline lenders are essentially lending banks that only offer mortgages as they do not provide services such as chequing, savings, or other forms of investment options. Many monoline lenders do not have a physical location, to reduce head costs, but do offer specialized programs and rates due to the specialization of their product
Q: Are monolenders safe?
A: The mortgage industry is heavily regulated by the government of Canada. Monolenders follow the same strict guidelines as the banks follow. As a mortgage broker, I work with monolenders on a daily basis. A large portion of my clients prefer monolenders over big banks due to the lower rates and ease of use.
Q: Are monolenders easy to?
A: Using a monolender is simple and easy to use. To acquire financing, talk to a mortgage broker and they'll be able to communicate with the lender for you to approve your mortgage. Your mortgage broker should go through many of the benefits and pre-payment options with the monolender. Upon financing, you'll receive a brochure with an overview of all your information. Through an online portal, you'll be able to find and conduct all your mortgage activity through the comfort of your home.
Q: How come monolenders offer lower rates than the big banks?
A: Monolenders focus ONLY on mortgages. Without the head cost of big physical locations like the big banks. Monolenders can provide lower mortgage rates for clients, and provide a better service.
Q: Is my mortgage portable?
A: Your mortgage is usually portable with most monolenders. If you plan to move, you can usually move your mortgage to your new house without paying a penalty.
Q: Why doesn't everyone use a monolender?
A: People choose places they are familiar with. Most of us have grown up with one of the big banks, so many are biased towards the ones we grew up with. I also see it similar to online shopping. Many of us know that its easier to shop online and they offer better pricing online. Yet, most of us will still go down to a supermarket because it's a place we're familiar with and we enjoy going to the actual physical location.