We are often questioned as to why people should use a mortgage broker instead of going to their banking institution. Mortgage brokers do not work for any specific lending institution and typically do not lend money but rather put you in touch with those who do. We are aware of private lenders that you may not be able to find on your own. It’s our role to find the lender with the terms and rates that best suit your needs.
Sometimes it’s easier to determine if a mortgage broker is right for you by comparing services offered from a financial institution versus the services available when you work with a broker.
Major Bank Personnel
Access to numerous lenders and products
No/ limited access to products outside their own
Exclusive broker products available
No access to broker products
We work with your best interests in mind
Works on behalf of the bank
Work 7 days a week with extended hours
Limited bank or branch hours
Instant access to new programs
New programs may not be available
Brokers build long term relationships with clients and lenders
If rates drop before closing you already signed the contract so are entitled to the new rate
Even though you will have access to many lenders, your credit report only needs to be requested once
If you are looking at various financial institutions, your credit report will be requested each time
Options! We find a lender to fit your unique needs
Brokers know that mortgages are more then just rates
We can travel to you
How many lenders can you draw from and who are they?
There are well over 20 lenders to draw from, far too many to list. Some very strong and solid mortgage companies that only mortgage broker/agents have access to. These companies deal only in quality mortgages which ensures clients can have a low rate with flexible terms.
What are your fees?
In most cases our fees are covered by the lender.
What should I know when shopping for a mortgage broker?
Get a referral from a friend or someone you trust, if that option is not available look around for a broker with AMP behind their name. These brokers are licensed and keep up with their educational and IMBA requirements. They go a step further. Talk to a couple brokers before you commit to the relationship. Short or long term, your broker will be listening and reviewing your financial details.
I’ve been a loyal bank customer for years, why should I deal with a mortgage broker instead of my bank?
Mortgage brokers and agents are not trying to take you away from your bank, we can even help you get a better deal from your own personal bank.
Should I also shop around to get the best mortgage rate?
Why would you? You have just enlisted us to do that for you. If you like and trust your broker and they have been referred to you by a trusted friend then you should let the broker do the worrying for you. You just sit back and relax!
What is the difference between fixed and variable rates?
A fixed rate is just that - It’s an interest rate that does not change over the course of the term. For example, a 5.5% for 5 years means for 5 years your rate will be 5.5% at the end of your five years. With the assistance of your broker, you will renew your mortgage for a rate that is available at that time. Most, if not all, fixed mortgages offer accelerated payment plans and prepayment privileges.
A variable rate works with the Bank of Canada. The Bank of Canada sets the overnight lending rate. Let’s say the rate is 1% (this is the rate charged to banks when they lend money). The banks and lenders then lend out the money at a 2% mark up. Your prime rate would now be 3%.
Your mortgage rate is going to be set at the time you sign your contract. Using the example above, you would subtract your prime rate by 0.30 bps. Your current rate would be 2.70%.
The biggest issue with the variable rate is you must be flexible and not adverse to change. With most mortgages your payment will change with prime adjustments. For example, if your prime rate goes up by 0.25%, the following month your payment will adjust to reflect the change as your new mortgage rate would be 4.05%.
I hear the term “closing date” often, what exactly does that mean?
Closing date is the date you get the keys to your home. In the example of a refinance, it is the date the new mortgage is registered and the old one discharged.
How long can you lock in my pre-approved mortgage rate, months? Years?
Usually 120 days, this depends on the lender. Some lenders are not offering pre-approvals, but only a “rate hold”. A good broker has the ability to underwrite and identify a deal that will be easily placed with any lender.
What will my costs be?
There are many extra expenses that come along with owning a new home. It is a good idea to be prepared for such costs. Some notable fees include:
* Home Inspection
* Appraisal – Property Survey
* Lawyers Fees
* Moving Costs including hook ups
* Land Transfer Tax
* Title Insurance
* CMHC/ Genworth/ Canada Guarantee (Mortgage insurers when your down payment is less than 20%)
* You should and can be prepared for all the hidden costs.