The one bank trap (how to choose your lender)
When you go talk directly to a bank, they will always have the upper hand.
They know everything there is to know about the products they offer – but you don’t. The problem with this? The solutions presented to you will be the closest fit to a product offered by that lender.
What are the odds that the bank you use also happens to be the most appropriate lender for your unique situation? Not very good.
This means that you could be attempting to do something that is not possible with your bank – leading to endless back-and-forth as well as paperwork... No matter how good your relationship with your banker is – they are tied to the lending policies of their institution. In the nature of business, they may even try to bend the policies to make the loan work and retain you as a customer.
Would you rather wear someone else’s shoes that have been modified for you, or a pair that was crafted specially for you?
Because every bank has constantly changing policies, risk appetite and procedures, the lending environment is never the same at two different points in time.
As we have outlined the dangers of the one bank trap, here is how to avoid it:
Go sit down with a few bankers or mortgage brokers that may have been recommended to you. Ask them which lenders they have access to. Do they work with all the banks? If not, why not?
Ask them about all the options on the market and which one(s) are most appropriate for your situation and goals?
Can you truly understand why have they recommended this lender over another?
If not, it is probably in your best interest to go talk to someone that can.