What services do mortgage brokers provide?
Mortgage brokers are independent, trained professionals licensed to prepare and present their customers’ qualifications to potential lenders to secure mortgage financing for the borrower. They provide the knowledge and experience required to simplify the entire process for the customer. Their specialty is negotiating for the best rates and terms for those seeking mortgage financing.
Why deal with a mortgage broker over a bank?
Dealing with a mortgage broker saves customers both time and money. Mortgage brokers have the ability to offer their customers a more varied range of lending options than a traditional lending institution can. While banks are limited to offering you their own product, mortgage brokers identify the ideal lending package for your individual needs. To do this, they will present your lending opportunity to a portfolio of lenders including trust and finance companies, private funds and a number of major banks. It always pays to shop around and a trained mortgage broker has the experience to negotiate for the best rates and the ideal terms and conditions for your individual needs.
How is a mortgage broker able to get a better
rate than my own bank?
Brokers are able to get a better rate because there are no hidden costs. It is more cost efficient for the lender to gain a client through a mortgage broker versus attempting to get your business via the retail branch network. Consider the costs in running a bank branch. There are costs for salaries, benefits, rent, utilities, furniture and advertising. The bank branch saves on these costs when a mortgage broker is used.
Other than rates, why should I use
the services of mortgage brokers?
Mortgage brokers specialize in securing mortgage-based financing and keep current on what type of mortgage financing each lender is providing. That means your customer profile is always pitched to financial institutions that have an interest in your business resulting in the most favourable rates for each borrower.
How do mortgage brokers find superior rates?
Brokers recognize that interest rates are a primary concern to borrowers. To secure the best rate every time mortgage brokers keep current on lenders’ preferences for types of mortgages. These preferences change frequently, depending on economic circumstances or based on the size of an institution's portfolio in a particular type of mortgage. Brokers know which project or home is most likely to attract a favourable interest rate from the many lenders that they are in daily contact with.
Your broker knows which lender to approach first for the best rates and that means that the mortgage rates obtained on your behalf by a mortgage broker will be among the best available in the market.
Will a mortgage broker charge me costs that I could avoid
by going to a lender on my own?
No. In fact, it pays to have a mortgage broker negotiate your mortgage. Our service is free of charge to our customers. Our company is paid by the successful lender who compensates us for bringing your business to them.
Why should I go to a mortgage broker first?
Mortgage brokers will prepare a professional presentation and they will direct your application to the most appropriate lenders. Their efforts are most likely to get the best response saving you valuable time and money. You don't call an insurance company directly for insurance - you use the services of an insurance broker. You should be using the same approach for your mortgage and taking advantage of the expertise, product knowledge and negotiation skills of a qualified mortgage broker.
How do mortgage brokers get better mortgage
deals than many banks?
We have relationships with many different banks and mortgage lenders, and can shop around for the best rates. And since we arrange dozens of mortgages each week, the lenders are more likely to give us volume discounts. To use an example, if you were able to buy a new car every week, it’s common sense to understand that the car dealer is going to give you a better price than someone who only buys one car every five years.
Can I use a broker to go through my bank branch?
Yes, a mortgage broker works for you. They will gladly represent you at any financial institution of your choice. A broker can often get you a better rate at your own bank than you could get yourself.
Can mortgage brokers provide pre-approved financing?
When should it be obtained?
Certainly. If you plan to make a real estate purchase in the next 2 to 3 months it makes good sense to meet with your mortgage broker to complete an application. That will allow your broker to secure an interest rate guarantee from a lender that will be able to be held for you while you are searching for a suitable property (usually for 60 to 90 days).
What should I know about the federal government agency (CMHC) that gets involved in some mortgages?
The Canadian Mortgage and Housing Corporation (CMHC) gets involved when a prospective homebuyer has a lower-than-average down payment. The CMHC assesses each individual’s situation and provides mortgage insurance to the lender, which adds a small premium to the mortgage.
Are brokers limited to only residential mortgages?
No. A broker can manage different types of loans if they are backed by mortgage collateral. Loans can range from small loans backed by residential property to large loans commercial properties in the millions. In addition to handling straight mortgages, mortgage brokers are often called on to assemble financing (based on mortgage collateral) for businesses. Mortgage brokers excel in arranging this type of financing package because of their expertise in looking at loans from a mortgaging perspective, as well as their knowledge of financial institutions' interests and desires for a particular product at specific times.
