About Mortgage Brokers
Mortgage Brokers: What are They?
You may be just beginning the search for a home and have heard of mortgage brokers. But what do they do and how can they help you?
Mortgage brokers are independent, trained professionals. They are licensed and are able to both represent and provide you with the best advice when it comes to your mortgage needs. Finding a mortgage is not nearly as simple as you may think and professional help can go a long way.
The primary expertise of a mortgage broker is to find you funding for your mortgage. Professional mortgage brokers should be knowledgeable as to where the best rates can be obtained. They will also be able to submit a proposal to obtain financing from those lenders.
Why Deal with a Mortgage Broker?
Even if you think that you can go about obtaining a mortgage yourself, a mortgage broker is meant to be a tool to find the best possible rates. After all, a mortgage broker represents the borrower, not the lender.
Since mortgage brokers are not employees of the lending institution, they aren’t limited to the products of one specific lending institution. Sure, you could go to the bank yourself, but you will only be offered the products of that bank. Mortgage brokers have knowledge about the various products offered by each lending institution.
That means that a mortgage broker can seek out the best possible lender package. This regardless of whether it is a Trust or Insurance Company, Chartered Bank, or Private Funds. And since there is such a wide assortment of lender options available to homebuyers, having a broker can be an invaluable asset.
Because of how competitive the marketplace is today, it can intimidate Canadian buyers. Working with a mortgage professional, one that will represent you fairly, can help you land the mortgage that suits you best.
Why should you use a mortgage broker? Because mortgage brokers can mean thousands of dollars saved or lost. Don’t leave money on the table when a mortgage broker can get you the best deal possible.
What Can Mortgage Brokers Do For Me Besides Rates?
Rates are a big part of the equation, but they are not everything that a broker can do. Since this is the broker’s primary business, they have an expert knowledge of what type of mortgage financing that each lender prefers.
With this knowledge on your side, it can result in favorable rates, but also whether or not a project gets funded at all. We can get ahead of ourselves thinking about the best rates instead of wondering whether funding is possible at all.
How do Mortgage Brokers Find Better Rates?
Because of how much they can cost in the long-run, interest rates are important to borrowers. And since they have daily contact with lenders, a mortgage broker can know which home or project will attract a favorable interest rate from which institution. Not only that, there are some mortgage institutions that will only accept submissions from a mortgage broker.
Since these rates can change daily depending on economic circumstances or based on the size of that institution’s portfolio in that type of mortgage, a professional helping hand is necessary. Mortgage brokers is current with those rates and knows which lenders are best to approach first. It is their job to bring the best rates to you and that is what they do.
Why Go to a Mortgage Broker First?
Going to a lender with a professional presentation on your first application will get the best response. This saves you both time and money. Any secondary applications with previous credit bureau inquiries could be more costly.
The success of obtaining mortgage approval can depend on the way that your proposal is presented and who it is submitted by. Having a mortgage broker present your mortgage proposal is more likely to garner an immediate, positive result. And that is what you need when looking for a mortgage.
To put it in comparison: you don’t call your insurance company for insurance, you call an insurance broker. That’s because they have the best product knowledge and expertise of rates. The same is true for mortgage brokers.
Do Mortgage Brokers Only Handle Residential Mortgages?
The best thing about a mortgage broker is that they can handle all kinds of different loans provided they are backed by mortgage collateral. There are many different loan types available, from small loans backed by a residential company to major commercial projects. It is not uncommon to find mortgage-backed loans in the millions with private pension funds and private lenders.
Mortgage brokers are also called on to assemble financing based on mortgage collateral for businesses. They are great at this kind of financing package because of their expertise in looking at loans from a mortgage perspective. They also have a deep knowledge of the interests of financial institutions and their desires for a particular project at a given time.
How Does a Mortgage Broker Get a Better Deal Than the Banks?
The lenders that work with mortgage brokers are various in nature. This can include trust companies, chartered banks, and even corporate and private pension funds.
Brokers also tend to develop professional relationships with private sources of funds. These are termed private lenders and can provide mortgage products that aren’t available through conventional sources. But for the best results, make certain to call your broker first.
You can also go through your bank with your broker since they can often get a better rate for you than you could on your own.