The Mortgage Broker Advantage
Need a Mortgage?
Your best option is to use an independent Mortgage Brokerage service. Mortgage Brokers are qualified professionals who are experts at matching a borrower with a lender. Registered Mortgage Brokers are truly independent. They do not work for any individual institution or lender, and their main objective is to get their clients the best possible mortgage that they qualify for.
A Mortgage Broker's Responsibility is to the Borrower.
The service is personalized and tailored to meet your specific needs. Brokers know the market and are familiar with the products offered by all leading lenders. One simple application taken by the broker over the phone provides you access to all of the mortgage products available.
Mortgage brokerage has been in existence in the U.S. for well over ten years. More than 75% of all mortgage transactions in the U.S. go through mortgage brokers. The large centres in Canada are following suit where the incidence of brokered mortgages increased from 14% to 25% from 1999 to 2001.
Currently, it is now expected that over 45% of mortgage transactions will go through brokers this year in Toronto, Calgary and Vancouver.
Why can you get a better rate through a Mortgage Broker?
Wholesale lenders offer the mortgage broker wholesale rates in return for the mortgage broker performing the expensive and time consuming function of originating the loan. The mortgage broker pre-qualifies the borrower, verifies the credit, income, and property aspects of the loan, and then presents the loan to the lender. Other lenders maintain staff and facilities to perform these functions and must include these costs in their rates.
Another reason brokers can offer discounted rates is that the lenders are buying mortgages that they may not have had access to previously. The reality is that you are not about to make an application at every lending institution! Your own banker is typically not authorized to offer you the discounts that are available.
If you consider the time-consuming effort of shopping numerous lenders and having to contact them on a daily basis for rate updates, it is easy to see why mortgage brokers are the number one choice of informed borrowers today.
What does it cost?
The service is free. Major lending institutions will pay a referral fee to a Mortgage Broker for sending them quality, qualified mortgage applications. In some circumstances, a borrower may not qualify for a traditional mortgage due to high debt, questionable credit, or other reasons stated by a lending company, the Mortgage Broker may be able to locate alternate sources of funds. In these cases there would be a fee payable, usually included in the loan or mortgage. Other fee-based services provided include; vehicle loans, personal loans and lines of credit.