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I want to talk to you about banks and non banks and what the difference is, why I might put you at one as opposed to the other. Well, banks is really simple to explain because you see them every day. You probably bank with them every single week. They're the royal banks, the TDs, the Scotias, the HSBCs of the world. They're the places that you see the advertisements on TV for.
You see them on every street corner, and you've grown to love and trust them. They offer you RSPs, insurance, checkings, savings, as well as mortgages. So mortgages is not their sole business.
How that compares to a non bank is simply that non banks are not banks. You can't get a checking account. You can't get a savings account. You can't buy insurance. You can't buy RSPs or anything of that nature.
Now why is that a benefit? Well, because it's obviously saving them costs. They don't have to pay for leases. They don't have to pay for employees. They don't have to pay for advertising because in actual fact, they're not trying to get your business. They're trying to get my business as a broker.
When it comes to non banks, you cannot call them up and try to get a mortgage. They will actually refer you to a broker who will then talk to us. Why do they do that? Is it because they're being dicks? No, they're not. Why they're doing that is because it's, again, saving them time.
It will cost a lot more money for them to deal with everyone in the general public than it is to just deal with handfuls of brokers. It takes a lot of time for us brokers to get all your paperwork, to go through the process, to explain liabilities, to explain your fees, to explain just the general process. That takes a lot of hours of our time.
What they're saying is basically "We don't want to spend that time. We're going to let you do the hard work. Pile it up, package it all nice and neat, [snaps finger] and pass it on to us."
Now they've saved the maximum amount of time and they're able to offer really great rates as well as really great products. As well, when it comes to banks, they tend to really like good A+ clients meaning good credit, good income, and things that can all be proven on paper and documented.
When it comes to non banks, they're kind of smart because they understand there are definitely A and A+ non bank lenders, but they'll only lend to people with 680 beacon scores and with income that can be documented and everything like that.
But there are also lenders who do the B and C clients, the people who don't have the best credit, because they understand that there's a market for that. We can basically pick and choose from all these B's and C's and let all these other lenders have the A's. So obviously that's a nice benefit.
The other nice benefit by going with a non bank is simply that once you get your mortgage, they're not calling you to try and sell you insurance, or trying to sell you RSPs or checking account, or anything like that. They're not even asking you to set up a bank account which very often, you have to do that if you go with a bank or a credit union. So that is a nice benefit.
Now with that being said, I use Scotiabank a lot. I use HSBC. I use banks as well. It is my fiduciary duty, to not only find you the best rate but to find you the best product that's offered based on your specific situation, whether that be that you're self employed, or be that you're a new immigrant or whatever the case may be.
I use both but I really felt it important to explain what these non banks are because people get worried and they go, "I've never heard of this person before and they're giving me money. Whose McCrory? Whose First Line or First National?" These are all non banks and we use them a lot. And there's definitely reasons why and it's all for your benefit.
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How to Get a Mortgage when Your Self Employedby MortgagesInVancouver1,038 views
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