When you’re buying a home the chances are you will need a mortgage to be able to finance the purchase of your home. With around 70% of Canadian households owning rather than renting their homes, mortgages are very common among the Canadian population, but since the economic crash of 2008 the banks (and the government) have become more stringent on their lending rules. Getting a mortgage today is still possible for many Canadians and newly arrived immigrants, but it may be more difficult than before. This is just one reason why using a mortgage broker is a good idea. Read on for further advantages.
What is a Mortgage Broker?
First of all, let’s look at what a mortgage broker does. A mortgage broker is like a middle man in your application for a mortgage. They are different to the mortgage advisors that you find in all the major banks because they are not restricted to talking to just one bank; instead, they act on your behalf, talking to many different lenders and banks in an attempt to secure a mortgage for you.
You do not pay for the services of a mortgage broker because he or she will earn a commission from the lender once your mortgage has been approved and financed. This is good news because not only is the service free for you, you know the broker will be working especially hard to get you a mortgage so that he earns his commission.
Is it Easier to Deal with a Mortgage Broker than a Bank?
If you have a bank account and a good relationship with your bank already you may be more comfortable talking directly to the mortgage advisor at your local branch. However, the advisor is limited to getting you a mortgage just with that bank. If your bank declines to give you a mortgage you will then have to approach another bank and go through the entire application process again.
When you deal with a mortgage broker they do all the hard work for you. You will fill out an application form specific to the broker and they will then use this information to put in applications on your behalf with a number of lenders. This saves you the time and hassle of having to fill out multiple forms, and the fact that they talk to several different banks for you saves you time and hassle there too.
Can You Get a Better Deal Using a Mortgage Broker?
The answer to this isn’t cut and dry but whenever you shop around you’re more likely to find a better deal, and this is often the case when using a mortgage broker. First of all, brokers will have experience dealing with the different lenders – they will know each lender’s preferences and nuances when it comes to lending so they will know which lenders are best to approach with your application. And, if the first lender does not offer you a mortgage your broker can quickly talk to another.
Sometimes a broker may end up with multiple offers of a mortgage for you, and, in this case he is able to get you the best deal because they’re in a good position to bargain with the lender, and they may have access to preferential rates that individuals cannot access.
So those are the main advantages to using a mortgage broker to secure a first mortgage when buying a home in Canada, proving that it’s well worth talking to a mortgage broker to save yourself time, effort, and potentially money.