There are over 400 types of mortgage products on the market and it’s hard to know whether you’re selecting the right one. That’s why Canadians are using independent mortgage brokers at an alarming rate because mortgage brokers can save you time and money!
An independent mortgage broker isn’t tied to any financial institution and instead works on behalf of you, the client, rather than the lender. Because they are not employees of a lending institution, mortgage brokers are not limited in the product they can offer you.
They can seek out the best mortgage options to suit your specific situation, from a multitude of lenders — banks, trusts, private companies, or insurance firms. Their primary role is to provide unbiased mortgage options and advice to clients.
Mortgage brokers can get better deals on mortgages, terms and rates because they have direct access to lenders. Once you’ve met with one, they’ll prepare a funding proposal and shop it around to get the best and most appropriate mortgage options.
Brokers with strong networks can often get nearly instant approvals and they can negotiate better rates and terms on your behalf.
In the vast majority of cases, clients don’t have to pay for the services of a mortgage broker. Instead, when the broker matches a lender with a buyer and a mortgage is placed, the broker is paid by the lender.
Their paycheque is based on the size of the mortgage, not the rate.
Major financial institutions have groups of in-house “mortgage brokers”. But they’re different from independent mortgage brokers because they sell clients mortgage products that are exclusive to the bank. If you’re keen to stay loyal to your bank, you can ask your independent mortgage broker to negotiate specifically with your financial institution.
Be careful who you choose to work with. Not all brokers are great and have their client’s best interests in mind. Get referrals from trusted friends or family members.
It’s also important to research current rates and structures in advance of meeting with a broker. That way you’ll have some idea of what you’re hoping to achieve and can clearly communicate it.