Now in their early 30s, both have careers in the theatre, something Hutton says has been a bit of a sticking point with banks. "In our industry, we never fit the paperwork guidelines for the banks. For some reason people don't think we pay our bills."
Although it was their first home purchase, Hutton says it was surprising how easy the whole process was once they had someone who could walk them through it. "He sat us down, told us what our options were, showed us that it was possible, and explained all the steps we needed to take. If it wasn't for him, we may not have made the leap."
Sorting through a mortgage process and negotiating rates can be overwhelming for first-time and seasoned homebuyers alike. That's why people such as Hutton and Coates turn to brokers to do the legwork for them.
Yet mortgage brokers will tell you that a good portion of homebuyers out there don't really understand what they do.
"Part of the challenge we have in our world is that people aren't really sure what a mortgage broker is," says Gary Siegle, a mortgage broker in Calgary. Brokers should not be confused with "rovers," mortgage specialists attached to a specific financial institution who visit customers outside of banking hours, he explains. "They only deal with that bank's product. A broker, however, is an intermediary whose job is to make a match between a lender and a borrower. We represent the individual, not the bank."
About 30 per cent of mortgages in Canada are done through a broker, according to Perry Quinton, vice-president, marketing for Investor Education Fund, a Toronto-based non-profit financial information service. "The reason more people don't know about them is because the banks are so visible. It's easy to gravitate to them when you have your savings accounts, credit cards and investments there already."
Going for the comfort factor could cost you, however, she adds. "A broker has access to different lenders including banks, and can shop rates and features. A half-per-cent may not sound like much but that could make a difference of about $20,000 for a $250,000 mortgage amortized over 25 years. Any little bit helps."
For anyone considering a broker, Quinton advises people to do a bit of groundwork first if they have the time. "It helps to educate yourself about options and what you can afford. Look at all your living expenses, including student loans and credit card debt. Chances are you are understating those."
Another thing to look into is the different types of available mortgages and features, including interest rates, payment frequency, amortization, cash-back programs, and the ability to make lump-sum payments. "Knowing these things before you go in can save you a lot of money," she adds.
Any mortgage broker you choose should always meet the right licensing and education requirements, so be sure to check their registration.
If you're not completely prepared however, that shouldn't be a concern when working with a good mortgage broker, Siegle says. "After all, mortgages are pretty much all we do. So even if you come in cold, good brokers will walk you through the process and ask all sorts of questions. You just need to be prepared to answer them openly and honestly so they can get you the best deal possible."