Confused a little about the steps to get a mortgage? Then mortgage brokers are the professionals to help you out during the mortgage process. Add to them to your home buying team after you search for a home.
Let’s take a look at the basics of mortgage brokers.
What is a mortgage broker?
A mortgage broker is the middleman between lenders and borrowers. They are independent and licensed professionals that know the nitty gritty of mortgages and how to obtain one.
What can a mortgage broker do for me?
A mortgage broker’s job is to secure you the mortgage rate. How do they do this? They shop around lending institutions, compare different mortgage products and choose the best one for your particular financial situation. With their guidance, they open the doors for more financing options and find the right mortgage for you. A bank is not your only choice.
Not to mention, educating you about the home buying process and mortgages is also part of their job description.
Why is it different than going to a bank?
Because mortgage brokers are independent, they don’t work for banks. This gives them the freedom to shop around and have more access to different mortgage product from both conventional and alternative lenders.
With a bank, whatever rates and products they have are the only options on the table. There would be little opportunity for alternatives when applying for a mortgage.
What are the benefits?
There is more than one benefit to mortgage brokers. The greatest benefit of working with a mortgage broker is that you can get the lowest possible rate available on the market.
A mortgage application comes with papers to sign, fine print and mortgage jargon. Brokers can translate and explain everything related to your mortgage and help you get other professionals to work with like lawyers. For the ones unfamiliar with the mortgage process, or simply the ones who want to avoid doing the paperwork, a mortgage broker can be a time-saver.
What do they charge for their services?
Mortgage brokers charge the surprising amount of $0. That’s right. In Canada, their services are usually free. Instead, brokers make money by getting a commission from lenders for securing clients.
You will only be charged a fee if you are looking for a commercial mortgage, a private mortgage or a small loan. Advance fees are normally not allowed for residential mortgages.