Do you want a great deal for your mortgage or the most competitive mortgage rate? If you answers yes to one or both of those questions then you should consider working with a Mortgage Broker.
A mortgage broker acts as a middleman between you and potential lenders. The broker’s job is to work on your behalf with several banks to find mortgage lenders with competitive interest rates that best fit your unique financial situation. Mortgage brokers have a strong network of lenders who they work with which can make your life easier.
While the majority of homeowners still use traditional banks for mortgages, according to the Canada Mortgage and Housing Corporation (CMHC) an increasing number of people are now choosing to work with mortgage brokers.
The main difference between your bank or mortgage broker is that a bank mortgage officer represents only the products their banking institution offers. A mortgage broker on the other hand is an intermediary who works with multiple lenders including major banks, small lenders, insurance and trust companies, and private funds, they often have access to a competitive rate. Mortgage brokers, work within a mortgage brokerage firm or independently, deal with many lenders and earn the bulk of their money from lender-paid fees.
There has been a tremendous number of changes in the last 24 months with mortgage regulations and the interest rate environment. There’s a greater need for expert or independent advice that a mortgage broker can offer.
According to this Toronto Star article, in 2017, 39% of homeowners used a broker to arrange their mortgage, up from 33 per cent in 2016, according to CMHC. On average, consumers consult with 4.5 mortgage professionals when seeking a home loan, including 2.4 lenders and 2.1 mortgage brokers.
Referrals, always referrals. Referrals from friends and family are a great starting point and perhaps the best way to find a tested and reliable Mortgage Broker. Still do your research and ask them important questions about their experience working with this broker. Learn all you can about the broker’s services, communication style, level of knowledge and approach to clients. You will be sharing a lot of your personal data with this person and you need to be comfortable that they would be the right fit for you.
Another great referral source is your real estate agent. Your realtor is very connected in their community and will have a well-developed list of contacts that include mortgage brokers in Toronto as well. Ask your realtor for the names of some brokers that they he or she has worked with and trusts. Some real estate brokerages offer an in-house mortgage broker as part of their suite of services, however you’re not obligated to go with that company or individual.
It’s always wise to interview at least two to three brokers to find out what services they offer, how much experience they have and how they can help simplify the process. And then select the one that you feel most comfortable to work with.
Marina Vander Heyden is a Mortgage Broker with the VINE Group, one of Canada’s top mortgage Teams operating under Mortgage Alliance. Marina is a well-respected, well-connected mortgage professional and shopping for solutions tailored to your needs is her expertise. Below, Marina shares why she believes working with a Mortgage Broker should be your top choice!
A mortgage broker is basically your mortgage personal shopper. As a mortgage broker, Marina has access to over 60 lenders which include: the big banks, credit unions, monoline lenders (mono means one, so they focus on only mortgages, therefore allowing you more flexibility). She also works as with alternative (B) lenders and private lenders offering her clients a diverse set of options for lenders to choose form and competitive rates as a result.
By doing the homework to find you both the best lender and rate, the mortgage broker saves you a lot of time. Your broker will make the phone calls, pull your file and paperwork together and do the submission to lenders on your behalf saving you time. Instead of applying at the lenders yourself and risk potentially lowering your credit score, your mortgager broker will do the legwork for you. If your broker finds a lender offering a mortgage with a lower rate, that could mean thousands of dollars in savings over the life of your mortgage.
It’s not just about the rate. As Marina likes to say, the cheaper the rate, the more expensive the experience. Marina chooses a product that aligns with the client’s goals so the client won’t get caught in any unforeseen costs or fees that the banks often don’t mention. In some cases, clients may have more options to pay down their mortgage faster, less fees to break their term early and portability if they’re moving from one property to another.
Mortgage brokers can find you the best deals because we represent your interest and not the interests of a lending institutions.
Brokers work hard to find the best mortgage product to suit the client’s needs and unique financial situation. At the end of the day Marina says that most of her business comes from referrals and the best way to get them she believes is to provide exemplary service to each and everyone of her clients. She offers personalized service and guides her clients through the fine print and explains every step along the way. She explains that she doesn’t get paid more by certain lenders so there is no personal benefit for her to choose one over another besides a better fit for her client – truly unbiased advice with a greater choice.
Mortgage brokers get paid by the lender upon closing of the transaction so there is no cost to the client to use services of a mortgage broker like Marina. In rare cases, unless you have a B or private file that may be subject to a lender and broker fee. Marina advises that nothing should come out of your pocket when working with a broker and run the other way if your broker asks for an up-front fee!
Mortgage brokers will do a hard pull once so you don’t have to shop around all several different banks having them do the same thing.
Did you know that if you do too many credit checks within a short time span, it can lower your credit score? If you apply at dozens of lenders yourself, not only is it time-consuming, it can lead to a lower credit score.
With a broker, typically they only have to pull your credit once, helping protect your score against needless additional checks.
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You see there are several reasons you should consider working with a Mortgage Broker. The next time you are in need of a mortgage, connect with Marina to discuss your opportunity and mortgage options.
This blog post is written in partnership with Marina Vander Heyden , a Mortgage Broker in Toronto with the VINE Group, one of Canada’s top mortgage teams operating under Mortgage Alliance and Madiha Khan founder of Toronto Condo Investments and Sales Representative with Century 21 Atria Realty Inc.
