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How much does it cost to use a Broker?
My services are free for residential mortgages. The banks, credit unions, and mortgage companies pay me a fee based on the mortgage amount - not the interest rate! This means I am not beholden to any one lender; so getting the best rate and mortgage for my client is my number one priority - not pushing one bank's limited offering.
In some rare instances where a client is in severe financial distress and needs access to private funds, along with a work-out plan, I may charge a fee in those limited cases.
Why doesn't my own bank give me the best interest rate?
For two reasons:
Banks, credit unions, and mortgage companies compete aggressively for quality mortgage business. I receive preferred pricing, which allows me to pass the rate discounts on to my clients. For this preferred pricing, my lenders expect that I stay current with their lending policies, that I provide them with pre-qualified clients that fit the type of business they are looking for, and that I deal with their underwriters in a calm, professional, and up-front fashion.
The acquisition and funding costs for mortgages generated through Mortgage Brokers cost banks significantly less than branch generated mortgages. Think of it this way; when a lender receives an application from a broker it usually has an 80% or greater chance of funding. The bank has spent next to nothing in overhead as the broker has obtained the client, conducted the interview, gathered the necessary documentation, structured the mortgage, and communicated the information electronically into their banking system. I then review the terms and conditions with my client, obtain the necessary signatures, and work with the client until after funding. The bank is not saddled with my office costs, administrative and salary costs, health plans, technology costs, or holiday pay. It's really a win-win situation for the bank and for the client.
Why use a mortgage broker?
Over 50% of Canadians do and the numbers are growing, because we offer:
Choice:
We deal with a greater number of banks, credit unions and
mortgage companies to find you the best rates available to you
based on your financial situation.
Convenience:
We do the work. We package your application, contact the head
offices to explain your situation and sell your application to the
bank. We bypass the local branches and deal directly with the
person that makes the decisions about you, the customer.
You can reach us, talk to a live person and we can be available to
you even outside of "banking hours".
Expertise:
We will save you thousands, we get you the best interest rate and connect you to the right bank that will offer you best terms
for your situation.
We arrange financing for residential/commercial, first/second/third
mortgages, and for very tough situations have access to private
funds and alternative lenders.
My bank declined me - can you still help me and get me a great interest rate?
I deal with this question on a weekly basis, and in fact many banks refer me clients that they want to help, but are unable to due to their lending policies. This shouldn't be news, but it is to most people - every financial institution in Canada has different lending policies! What doesn't fit one lender's policies - be it credit scores, self-employed income calculations, rental suite calculations, equity lending, acreages, unique properties, allowable income such child tax credits and support, and the list go ons - I have a number of banks, credit unions, and mortgage companies rolling out the red carpet for this type of business with equal or better rates!
Who does the mortgage broker represent, the bank or the applicant?
Both. We negotiate on your behalf with the banks, but we also want to be careful to protect our banks, as business partners from fraud and show them applications that meet their guidelines.
How do you know which bank is right for me?
Each bank has different underwriting guidelines. They specialize in different type of applicants. This very often prevents them from dealing with unique cases. We continuously study the guidelines of each bank and keep up-to-date with the changes. If you happen to be self-employed or own a rural property or have less-than-perfect credit most banks will not deal with you. We specialize in hard-to-approve applications.
What happens when I keep checking my credit at various places?
We check your credit once and we use the same credit report for all the financial institutions where we represent you, this way your credit stays the same. We will even help you improve it at no charge.
