A monoline lender is one that only deals in one (mono) type of lending, which in this case is Mortgages. These lenders often do not have Branches you can visit, you can’t open up a chequing account, investment accounts, or sign up for a credit card. They just do mortgages and often offer rates that are better than your bank…
Due to their focused attention to mortgages, no physical locations, and dependence on mortgage brokers for clientele, their overhead costs are so low that they can afford to beat the banks. Most homeowners that seek mortgages from mortgage brokers often land at non-banking institutions because they offer better products than the banks.
In some cases, homeowners may not have even heard of some of these monoline lenders and often feel a misplaced sense of uncertainty with dealing with monoline lenders. They feel that there is some sort of risk that may exist because they don’t see branches in their community or know of anyone else in their circle that has a mortgage with these lenders. But they’re often surprised to learn that they are no more/less risky than their banks and many of these monoline lenders have hundreds of millions, if not billions of dollars in mortgages at any given time. They are also regulated by financial oversight administrations to ensure that the borrowers are protected. Here are a few more benefits to highlight:
- Only deal in mortgages so you’ll never be haggled to get more products from them
- They pass on their costs savings from the lack of storefronts, employees, etc.
- Flexible approval guidelines – consider an application with some “grey areas”
- Quicker turn around than banks
- Access your account details online with dedicated customer service support by phone/email
I get it, our default setting is set to the bank we deal with, and we feel safe if they’re one of the 5 major banks we’ve known all our lives. But the truth is, those institutions know your default setting and they bank on (no pun intended) this notion to gain your business when the reality is that there are better lending options that exist….
Let’s recalibrate together, give us a call 905.455.5006