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Finding a suitable and affordable mortgage is pretty tough if you don’t know where to look, especially around Canadian cities where housing costs are through the roof. If you’re struggling to find an affordable mortgage, your search may go easier if you hire a mortgage broker as working with one can come with some serious advantages.
A mortgage broker is a housing market professional who works for a mortgage brokerage. To become a certified broker, one of these specialists needs to go through a training program and obtain a license from their provincial or territorial government.
Most mortgage brokers have an extensive network of home financing providers that they do business with, such as banks, credit unions and alternative or private companies. In exchange for a percentage of the proceeds, otherwise called a commission, the broker helps these lending companies fish for new clients.
Watch Lendmore Financial’s Dave Johnson explain the benefits of using a mortgage broker.
Here are some of the other common tasks a mortgage broker performs day-to-day:
Basically, a mortgage broker’s job is to connect you with a mortgage provider and financing program that suits your particular financial and personal preferences:
One of the best things about mortgage brokers is that they can connect you with multiple mortgage lenders and rates. This will allow you to compare multiple offers and choose one that best meets your needs. On the other hand, traditional mortgage lenders, like banks, can only offer you their specific products and rates.
Bank | Mortgage Broker | |
Description | Licensed banking company offering a range of financial products (loans, accounts, credit cards, mortgages, etc.) | Licensed mortgage professional, partnered with numerous lenders. Paid a commission by the lender for brokering mortgage deals |
Credit Lending | Yes | No |
Application Assistance | Yes | Yes |
Popular Examples | BMO, TD, RBC, Scotiabank, CIBC, Tangerine, EQ Bank | Dominion Lending, Safebridge Financial, CanWise Financial, The Mortgage Centre |
Pros | Becoming a client can help you access preferred deals and dependable financial security | The ability to negotiate with multiple lenders for the best interest rates, mortgage plans and volume discounts |
Cons | Can only offer their products and rates, which may be higher than other lenders. Plus, you have to broker the deal alone. | Some mortgage brokers aren’t as trustworthy as banks. Additionally, many first-time homebuyers don’t even consider them as a potential option |
Hiring a mortgage broker can be the best option to find the mortgage you’re looking for, nonetheless, there are several important drawbacks to consider when working with a mortgage broker.
If so, think carefully and make sure to get some financial and legal advice before you sign or pay anything. While a good mortgage broker can connect you with the best lenders, rates and payment plans in your area, the unfortunate truth is that they may not have your best interests at heart. As a loyal client, you might even get treated more fairly by your bank. Then again, under the right circumstances, a mortgage broker could help you score a really great home financing plan, as long as you know where to look.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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