The Benefits of Using Mortgage Brokers
The following post is from our friends at RateHub.ca I have used a mortgage broker for everyone one of my mortgages. Their service has saved me time and money but most of all it has saved me the hassle of negotiating mortgage rates with different banks. Best of all using a mortgage broker hasn’t cost me anything, they are paid by the lenders.
Traditionally, when you you needed a mortgage to buy a home, you would go to your bank to try and get the best mortgage rate available. But the process can be a lot easier if you choose a mortgage broker.
Time is precious and you don’t want to spend hours looking for a mortgage and you don’t want to visit a variety of financial institutions or try to figure out what type of mortgage is best. A broker can do the work for you by shopping for the lowest rate and finding the right type of mortgage that’s ideal for your situation.
The popularity of mortgage brokers in Canada is also growing. In 2015, a report from Mortgage Professionals Canada found 42% of borrowers who took out a new mortgage used a mortgage broker. That’s up from 26% in 2003.
Brokers vs. banks
While banks can offer you a discount on services if you bring all of your business with them, there are many advantages if you decide to choose a mortgage broker instead of a financial institution.
Brokers are able to look for different rates from a variety of lenders and do the negotiating on your behalf. They’ll often receive volume discounts and pass on the savings to you.
Mortgage brokers also have access to a number of lenders whereas your bank won’t refer you to the competition. They’ll also able to tell you what lenders will consider you as a borrower and the ones that won’t based on your financial circumstances, which is helpful if your credit rating isn’t good. Brokers can speak to lenders who work with borrowers that have poor credit and they’ll be able to use their clout with their connections at the major banks.
They’re also able to source exclusive deals and can sometimes get a better interest rate or reduced application fees from lenders.
The one thing to keep in mind is that a broker isn’t the one who provides and services the mortgage. Most of the major Canadian banks sell through mortgage brokers and a bank or other lender will actually collect payments from you and provide customer service. But you can still keep in touch with your broker as long as you have your mortgage.
The bottom line
Mortgage brokers are a great choice if you find the whole process of shopping for a mortgage a daunting task. Best of all, using a mortgage broker doesn’t cost you a cent.
RateHub.ca is a website that compares mortgage rates, credit cards and deposit rates with the goal to empower Canadians to search smarter and save money.