Mortgage brokers in Canada provide an intermediary service between you and your mortgage lender. A broker will originate your mortgage, evaluate your situation, match you up with the best product to suit your needs, do the paperwork, and then hand you over to your lender.
Brokers can access multiple products from a range of lenders and banks, get you a volume discount on your mortgage rate and guide you along the home financing process. And they do it all for free! That is, brokers are paid by the lender, and provide their services free of charge to borrowers.
Surprisingly, only 27% of new mortgages are sourced through mortgage brokers (see chart below). Given the obvious advantages of using a broker, it can only be assumed many of these are not known to first time home buyers. So, here are the big ones.
- Brokers work on your behalf to find the most competitive rates; essentially, they do all the negotiating and haggling so you don’t have to
- Mortgage brokers have extended hours, since they operate independently. This means that it is possible to contact your broker during nights, weekends, and even during holidays
- Your mortgage broker treats each client as an individual and is never pressured by quarterly statements the way that banks are
- Mortgage professionals have relationships with multiple lenders and financial institutions, which means they have greater scope of the mortgage industry, what products are available, and what the best mortgage rates are
- Did we mention a broker’s services are FREE?
It may seem more convenient to just walk in to your current bank and take out your mortgage there, but this ‘convenience’ will come at a price. First-off, you should never accept the first offer or go off the rates posted on your bank’s website: these mortgage rates are highly inflated. Further, banks sometimes interpret your loyalty as an inclination to not compare mortgage rates. In this case, a bank will not present you their best deal. Banks also are limited to their own products and services, and cannot access the breadth of products a mortgage broker can. Finally, bank representatives are simply not as incentivised as brokers to acquire industry knowledge and provide the best service: after all, a broker’s business depends on it.
So, save yourself both time and money, and consider a mortgage broker on your next home purchase.
*CAAMP Spring Survey 2011
This article was provided by RateHub.ca, an independent, impartial mortgage rate comparison platform. We bring the most competitive mortgage rates to one place, so you can make informed and efficient decisions. We believe that finding the best mortgage rate should be straight-forward, and our website has been designed with that in mind. RateHub works with the top mortgage brokers and lenders in Canada to bring you the most competitive mortgage rates. We update our rates on a daily basis with accurate, real-time data. We also provide ongoing mortgage education and resources to assist you in your selection process.