Anyone use a second tier mortgage lender?

Alfisti · 06-15-2016, 11:29 AM

More a question for the Aussies and Canadians as the yanks have such a complex financial system and I know SFA about the euro system.

Mortgage renewal is up and we have been shopping around, the best offer right now is from the second tier lenders, so lenders outside of the big five banks. Basic terms appear to be the same but I have heard they can be ruthless if you miss a payment or screw things up somehow.

For the locals, I am dealing with BMO at 2.35%, First North and Butler at 2%. Paying 1.8% right now but that's off the table.

Any experience?

JohnnyCanuck · 06-15-2016, 11:42 AM

Is BMO your current lender? And your current main financial institution?

If it is, you might get a better rate by shopping the bulk of your financial business to another major bank (RSPs, TFSAs, investments, credit cards, etc). Banks like new business better than existing sometimes.

I've never really banked with BMO, but when our mortgage was up for renewal with RBC, we shopped around and secured a better rate from a second tier mortgage company, quoted that rate to RBC and they matched it. In other words, some banks will move to keep your business.

Alfisti · 06-15-2016, 11:54 AM

Yeah that's the plan JC, we have everything with BMO. So mortgage, LOC, RESP, RRSP etc.

So maybe you're right, I try and shop all of it to other lenders and see how we go.

Flying Ace · 06-15-2016, 12:04 PM

oh...you mean 2nd lien

JS135 · 06-15-2016, 12:28 PM

Yes, my lawyer called them a "B Lender".

Currently with RMG mortgages. 5 yr variable @ 2.05%. So far so good. It was absolute hell to try and get the papers signed rght up until the closing for my house. They requested random documents that they could have asked for weeks before instead of making me rush around and potentially not meet the closing. It's like they didn't want to lend me the money.

Accelerated biweekly, money comes out just fine automatically. I still have my house so that's a bonus... haha

(I'm in Ontario)

Joekerr · 06-15-2016, 01:13 PM

Yeah, I've dealt with the 2nd tier twice on two mortgages. To be honest, as long as you don't miss a payment or whatever, my experience has been good (never missed, so not sure what happens, but guessing it isn't good).

In both cases they were cheaper than the big banks. The first one I dealt with (can't remember the name, but not one of the two you mentioned) - they really made me jump through some hoops especially at the end. It got to the point that I told the mortgage broker they could go take a flying leap because I wasn't complying with their last asinine request and to find me another lender - wouldn't you know it - there were no further requests on their end after that.

The second one I dealt with (different house - First National) has been fine - no serious hoops or if so, the broker took care of it without me knowing.

So don't discount them - but definitely shop the big banks for new business. My current bank was willing to come down off their posted rate, but they were still 0.05% above the 2nd tier so I told them tough luck.

06-15-2016, 11:29 AM	#1
Alfisti Brigadier General 6959 Rep 3,284 Posts Drives: 2008 Saab 9-3 Combi Join Date: Nov 2014 Location: Toronto, Canada iTrader: (0)	Anyone use a second tier mortgage lender? More a question for the Aussies and Canadians as the yanks have such a complex financial system and I know SFA about the euro system. Mortgage renewal is up and we have been shopping around, the best offer right now is from the second tier lenders, so lenders outside of the big five banks. Basic terms appear to be the same but I have heard they can be ruthless if you miss a payment or screw things up somehow. For the locals, I am dealing with BMO at 2.35%, First North and Butler at 2%. Paying 1.8% right now but that's off the table. Any experience?
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06-15-2016, 11:42 AM	#2
JohnnyCanuck Major 1258 Rep 1,352 Posts Drives: 2018 Audi RS3 Join Date: Oct 2009 Location: Vancouver iTrader: (1)	Is BMO your current lender? And your current main financial institution? If it is, you might get a better rate by shopping the bulk of your financial business to another major bank (RSPs, TFSAs, investments, credit cards, etc). Banks like new business better than existing sometimes. I've never really banked with BMO, but when our mortgage was up for renewal with RBC, we shopped around and secured a better rate from a second tier mortgage company, quoted that rate to RBC and they matched it. In other words, some banks will move to keep your business.
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06-15-2016, 11:54 AM	#3
Alfisti Brigadier General 6959 Rep 3,284 Posts Drives: 2008 Saab 9-3 Combi Join Date: Nov 2014 Location: Toronto, Canada iTrader: (0)	Yeah that's the plan JC, we have everything with BMO. So mortgage, LOC, RESP, RRSP etc. So maybe you're right, I try and shop all of it to other lenders and see how we go.
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06-15-2016, 12:04 PM	#4
Flying Ace Lieutenant General 5046 Rep 11,904 Posts Drives: G05 45e, 997.1 & 991.1 GT3s Join Date: Jul 2014 Location: SF, CA iTrader: (5)	oh...you mean 2nd lien __________________ 22 Phytonic/Coffee X5 45e (CoVID-free) 08 Speed Yellow 911 GT3 Sharkwerks 12 AW/Cinnamon X5d Sports Pkg (retired) 14 AW/Beige M6GC ZCP, MPE, V2 steering wheel, vorsteiner (retired) 08 SSII/Black E90 M3 (retired)
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06-15-2016, 12:28 PM	#5
JS135 Private 7 Rep 74 Posts Drives: 2009 135i M-Sport Join Date: Jan 2014 Location: Toronto iTrader: (0)	Yes, my lawyer called them a "B Lender". Currently with RMG mortgages. 5 yr variable @ 2.05%. So far so good. It was absolute hell to try and get the papers signed rght up until the closing for my house. They requested random documents that they could have asked for weeks before instead of making me rush around and potentially not meet the closing. It's like they didn't want to lend me the money. Accelerated biweekly, money comes out just fine automatically. I still have my house so that's a bonus... haha (I'm in Ontario)
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06-15-2016, 01:13 PM	#6
Joekerr Banned 7922 Rep 1,923 Posts Drives: 2017 Audi S6 Join Date: Jan 2008 Location: Toronto, ON iTrader: (0)	Yeah, I've dealt with the 2nd tier twice on two mortgages. To be honest, as long as you don't miss a payment or whatever, my experience has been good (never missed, so not sure what happens, but guessing it isn't good). In both cases they were cheaper than the big banks. The first one I dealt with (can't remember the name, but not one of the two you mentioned) - they really made me jump through some hoops especially at the end. It got to the point that I told the mortgage broker they could go take a flying leap because I wasn't complying with their last asinine request and to find me another lender - wouldn't you know it - there were no further requests on their end after that. The second one I dealt with (different house - First National) has been fine - no serious hoops or if so, the broker took care of it without me knowing. So don't discount them - but definitely shop the big banks for new business. My current bank was willing to come down off their posted rate, but they were still 0.05% above the 2nd tier so I told them tough luck.
	Appreciate 0 Quote