If you do not know what a mortgage broker does, you are not alone. The Mortgage Professionals Association of Canada took a survey and found that 39 percent of people buying their first home did not know much about what a mortgage broker does and how important they can be to the process of buying a home. When homebuyers are informed about the services of a broker, they are much more likely to seek one out for the mortgage process. When homeowners understand only a little about brokers, only 36 percent are likely to use one, but that number increases to 59 percent and more with the more information they receive. If you don’t know about mortgage lender services, you could be spending thousands more than is necessary. Following is a list of 7 reasons to get a mortgage broker when you are buying a home.
1. A mortgage broker can find lower rates on mortgages.
This is because they have connections to a large number of lenders and rates. They know about loans and rates that credit unions and banks do not advertise to the world.
2. A mortgage broker does not just know about the lowest rates and lenders; they have accessibility to them.
A broker can find a lender and negotiate terms for home buyers. The most experienced mortgage broker has already formed relationships with lenders and banks. When you don’t use a mortgage lender, you risk interest rates that are higher than they have to be and more severe penalties for breaking a mortgage. Not going with a broker can mean paying out thousands more than you would have to otherwise pay.
3. A mortgage broker can customize the mortgage according to your needs.
For example, a Vancouver mortgage broker can find lenders that have flexibility with terms of prepayment and the sensitivities involved with self-employment income. Their access to a wider variety of lenders means they are more likely to find a mortgage that suits your situation and has the lowest rates on current mortgages.
4. A mortgage broker is your ally.
You can get information from realtors, but an agent can explain it all to you and help you understand the process. There is no question that a bank is more interested in selling their product than they are in helping you customize the perfect plan for your needs. Banks are not necessarily bad to deal with, but a mortgage broker is less interested in selling a specific product and is there to help you with your unique needs.
5. A mortgage broker will not charge you for their services.
Lenders pay them a commission, but that does not mean the broker will ignore your needs. Brokers work to get you the deal you need because they depend on the referrals of their clients. Feel comfortable in asking prospective mortgage brokers about their compensation. Some critics argue that the cost of commission is passed on to the borrower through the lender. This may be true, but if you are receiving lower interest rates, you will still come out on top.
6. A mortgage broker has experience.
They have dealt with numerous clients in various situations. They know how to consider how life changes and how it can affect mortgage terms. They can explain possible situations that may occur and offer up options for them before you have thought about it yourself. This has the potential to save you thousands of dollars.
7. A mortgage broker adds convenience to home buying.
When you work long hours and have small children and other responsibilities, it can be hard to make and keep appointments with the specialist at a bank. A mortgage broker comes to you at your convenience and explains all of your options, essentially doing all the homework for you. You can ask the questions you want to ask and get to know your broker, which will make you feel more comfortable with the choices they present to you. It is a good idea to build a trustworthy relationship with your agent. Your broker should want to be there for you. Many mortgage lenders make it a point to respond to your emails, texts, and calls, even when the business day is done.
Take the time to find the best broker for your needs. Look up the brokers and look at all the reviews you can find. Ask family, friends, and co-workers for recommendations and ask a potential broker for a list of references. It is a good idea to research mortgage products so you can ask your broker to explain what they are and how they might be used in your situation.
There is no shortage of mortgage brokers. You will find them all over Canada. It is wise to start looking and interviewing brokers before you begin looking for the home you want to buy. When you are looking for a home, you want to be confident about taking out a loan. With a broker, you can enter into the search, knowing you are getting the best mortgage rates with options that are best suited for you.