The financialization of the economy is a major trend of our time.The “dad’s bank” which kept your money in its coffers has evolved strongly to offer a whole range of financial products always more pointed. The digitization of the economy has also had an impact on this sector. Indeed, the emergence of banks and online credit institutions devoid of physical offices.
These upheavals have had positive impacts for individuals and businesses that use these financial services. The scope of the offer has made it possible to respond to more specific needs. More specifically, in the mortgage sector, which offers solutions that are closer to tailor-made.
In addition to generalist firms, some lenders have specialized to occupy a specific niche.
An enrichment of the offer, at first glance positive, which has its flip side.
Mortgage loan: the perverse effects of the diversification of the offer
The proliferation of mortgage offers and formulas, however, has a perverse effect for consumers. Sometimes they are offered by institutions that have decided to occupy a niche in this market.
How to find the product adapted to its needs, and at the best cost, among this plethoric offer? This is all the more complicated because, in addition to the rates, you have to understand the terms of a product. This is a very complex task for the uninitiated.
Judgment is good, but who else but a mortgage broker can offer you tailored advice to help you make the right choice? Because the pitfalls that await households wishing to buy a home are numerous. Here are a few.
How to choose a mortgage?
The most common pitfall in which individuals fall is to focus solely on the rate of a mortgage offer. Certainly, the lower it is, the better. But, the terms and conditions of your contract should be reviewed to see if they are consistent with your borrower profile and your personal situation. Penalties in the event of a break-up are an important point to watch.
Each credit organization accepts or refuses to grant a loan according to specific criteria. Institution X may well decide not to grant a mortgage loan to Mr. Laval, while he will be able to sign with institution Y. To avoid wasting time in unnecessary solicitations, the broker may refer you to the organisms. It will analyze the most likely to welcome you with open arms while offering an attractive offer.
Many Canadians, when it comes to contracting financial products, have the reflex to turn to the institutions of which they are already customers.
It is known, it will be easier to have all its contracts with the same agency … The reasoning seems logical, but it is not necessarily true! Addressing a mortgage broker is certainly no more complicated, while he can provide you with tips that can earn you money. Banks know very well that the majority of their customers who are talking to them do not compare, so they tend not to offer the best terms, even if it may seem counterintuitive.
Online mortgage, the panacea?
Online lenders, by definition, have lower operating costs. They are therefore likely to offer more competitive mortgage solutions to their customers. To this financial advantage are also added time savings: no need to move to an agency. Some Quebecers are apprehensive about signing such an important contract with a virtual or virtual institution.
This ignores the fact that many of the online mortgage players in Canada are in fact owned by major financial groups, both Canadian and foreign. You may be wondering what is the point of using a mortgage broker if it is to take credit online. Not only will it be able to sort through the many players in the market, but some products are only marketed through it.
Due to the sophistication of financial products in Canada and the multiplication / specialization of lending companies, banks and caisses in some niches, finding the right mortgage can be complicated and time-consuming. The borrowers are often obsessed with the loan rate, without paying attention to the terms of the loan, which can be disastrous if you need a way out. Using the services of a broker makes it possible to obtain a mortgage loan on the best possible terms, in terms of rates and clauses.