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This may seem like a simple question with an obvious answer, but there are very few people who actually

consider this question when seeking mortgage advice. Whether you deal with a bank employee or a mobile

mortgage representative (who also works for the bank), you must understand that their main goal is to look

out for the bank’s best interest – not your best interest! Because most of all, banks are morally and legally

obligated to provide the best return for their shareholders, which can pose a big problem, particularly if you

are looking for unbiased mortgage advice. In fact, banks are not always as upfront about mortgage advice

as you may expect, as many clients find this out the hard way.


As an example, when the clients approached their bank’s “mortgage specialist” to explore their refinancing

option, the specialist approved them for what they thought was a good rate with good terms so they quickly

signed their mortgage documents and they happily walked out the door. However, these clients ending was

not so happily ever after… Their story continues…


Due to their growing family, the clients decided that it was time to sell their home and to move to a larger

and more spacious house that could accommodate their personal needs and wants better. After consulting

with a realtor, they wanted to find out what bank options were available to them. Unfortunately, they found

out that their bank’s rate and terms were not very competitive in comparison with current market offerings;

therefore, the clients wanted to further find out how much it would cost to buy out their mortgage. By using

the bank’s online calculator, the clients determined that their prepayment penalty would be somewhere in

the $5,300 range. But this was far from the actual truth… When they later consulted with a bank employee,

they were surprisingly told that their penalty would actually be around $22,000!!!


Imagine that shocking news… The clients could not believe how this was even possible.


Their bank representative explained that their “mortgage specialist” had given them a discounted rate on

their last refinance and because of this, they would be penalized another 1.85% in their penalty calculation.

This accounted for the additional $16,000+. In lieu of this additional penalty, the clients were not in a good

position of having enough equity to sell their home and then to purchase a new property.


cartoon with three bankersSo in the end… Whether you are a first-time homebuyer, upgrading to a larger home or downsizing, it is very important to understand who your banker works for prior to seeking mortgage advice. Because that “great rate” that the clients are always promised from their mortgage specialist can result in a substantial amount of hardship and stress down the road.