Canada Finance Blog

Points to Remember While Searching for Home Financing

After finding the right house to live in, you need to search for a loan to buy it. Normally, people don’t have enough money saved up to buy a house. They approach either a mortgage finance company or an established bank for home financing. Both options have their own merits and demerits. Let us now look at the advantages and disadvantages of securing a loan from a bank and financing by a home financing company.

The Bank Getting a loan from your local bank will be easier and faster since the bank already has all the information it needs to grant you the loan. The bank probably knows your credit historyand your ability to pay back the loan. Since you already have dealings with the bank, your loan application will be approved in your favor. The rate of interest on your loan will also be lower if you take the loan from a bank. On the other hand, if you go to a home financing company, you have to go through a mortgage broker and you have to produce a number of documents to prove your identity. Completing all the formalities required by the home financing company might waste some of your valuable time. The rate of interest will also be higher than that of the bank. If you decide to go with the mortgage broker, you will have no choice other than accepting the loan provider chosen by your loan broker, irrespective of the terms and conditions of the loan. The Mortgage Broker Some mortgage brokers act in the best interest of their clients and they search for the lowest rate of interest and easiest terms and conditions for loan repayment. It means that you can shop around for the right type of home finance. If you choose a mortgage broker, he / she will do everything necessary to secure the mortgage. You don’t have to waste your time and energy. If it is a bank that you have chosen to finance your home, you have to personally report to the bank during business hours. You have to accept all the conditions laid down by the bank. The final choice is yours. If you are short of time and don’t know how to secure a loan, choose a mortgage broker. If you can spare some time and go to your friendly local bank, the bank will be a better choice. Before taking a final decision, consider both the options thoroughly.