More and more Canadians are turning to mortgage brokers to bet the financing for their home financing, refinancing, renewals and purchases. Where mortgage brokers used to only do about 10% of the mortgage financing in Canada 25 years ago, about 40% of all mortgages in Canada are completed through mortgage brokers today. As Canadians learn that working with a professional that represents their interests and will be there for them in the future is so important in today’s housing market.
Before signing a mortgage contract, if you haven’t talked to a mortgage broker, its good idea to assess your options and determine which type of mortgage and lender is the best option for you and your financial goals today and in the future. Here’s a quick rundown of what mortgage brokers can do for potential borrowers.
A mortgage broker can be characterized as a conduit that connects mortgage borrowers and mortgage lenders together. A mortgage broker will help protect your credit rating by only pulling one credit bureau report that they can use with all the lenders; they will use this to analyze your mortgage options and present you with 2-3 options before making a recommendation. Then the mortgage broker will then arrange the mortgage that best suits you with the lender, coordinate with your Realtor in the case of a home purchase, and the notary or lawyer to guide you through the mortgage process.
Is a mortgage broker better than a bank?
This decision depends on your financial situation and goals. The answer will usually vary from one borrower to the next. In order to give you a clearer idea of what you will gain by working with a broker or a bank, here’s a list of potential benefits that borrowers stand to gain if they choose a bank or a mortgage broker.
Mortgage Brokers
- In serving as a facilitator that connects borrowers to lenders, brokers complete the application process once with the borrower and can submit the application package to multiple lenders. This saves borrowers from having to go around and seek multiple quotes from various lenders in different places while protecting the borrower’s credit score.
- Most of the time, brokers are able to offer better and more competitive rates than big banks.
- Brokers can help find mortgage options for all types of borrowers including those who have good credit and income to those that are having a hard time getting approved on account of not being able to satisfy the lending requirements.
- The mortgage broker works for you and will keep your best interests in mind when shopping around for a mortgage for you.
- Mortgage brokers can often place a mortgage with your own Bank or Credit Union, but will make sure there isn’t a better solution for you available through them. They can also point out difference between lenders and why you might want to use a different one at that time.
Banks & Credit Unions
- Employees of the bank or credit union have no obligation to have your best interests in mind, they work for the Bank or Credit Union and that is their primary interest.
- Borrowers may already have a relationship with their bank or credit union. Some borrowers feel more comfortable working with their bank.
- The approval process may be different as a bank may already have access to information like a client’s account, work and credit history. As such, they may be able to make a decision internally.
What’s the difference between a mortgage broker and agent?
The main differences between a mortgage broker and a mortgage agent is a mortgage broker often refers to the firm or the principal broker who is licensed as the designated individual at the firm, whereas mortgage agents work on behalf of these licensed firms and/or individuals. Additionally, a mortgage broker is required to have at least two years of work experience and must have passed an approved mortgage broker course. An agent has taken and passed a mortgage agent course is hired by a mortgage broker.
Qualifying for a mortgage
Regardless of whether you choose to work with a bank, credit union or a mortgage broker, the lender will look through your income and debt load when they try and calculate the size of mortgage you qualify for. This is where a mortgage broker really shines in comparison as they will do the homework for you and look at multiple Banks, Credit Unions and Mortgage Specific Lenders to find you the best mortgage rate and terms for your situation.
What does a mobile mortgage specialist do?
Mobile mortgage specialists are essentially bank employees who operate in a similar vein to traditional mortgage advisors but with only access to their lenders mortgage products. These specialists are paid a commission based on their sales. Mortgage specialists differ from mortgage brokers in that they are only able to offer mortgage products from the bank or credit union they work for.. Conversely, mortgage brokers can offer you access to a wide variety of mortgage and lending products from a variety banks, credit unions and other financial institutions.
How Mortgage Maestro can help
Mortgage Maestro offers homeowners, borrowers and new homebuyers an easy mortgage process that can be completed in the comfort of your own home with the help of our team of experts. We can provide you with financing for your mortgage or even use our extensive network of lenders and find a mortgage solution that helps you achieve your financial goals. Our advice is unbiased and free of any external influence.
Contact us today and we’ll have an experienced mortgage professional reach out immediately.