I often get asked the question, “Why would I use a mortgage broker & not just go to my bank branch to get a new mortgage or renew my current mortgage?” I can tell you that there are a number of reasons why a mortgage broker is the better option when looking for a mortgage.
The first is the number of lenders a broker has access to, most brokerages have relationships with more than 30 lenders. With variety comes competition, the more lenders you have vying for your mortgage, the more attractive rates & mortgage features get. There is also some flexibility in qualifying policies from lender to lender, one may decline your application but another might be happy to approve your mortgage. These are things you don’t need to worry about when you have a broker on your side.
“I’m worried that my credit score might drop if I visit a number of banks & complete applications?” Another advantage of using a broker is that we only need to run your credit report once. This same credit report can be transmitted to multiple lenders when qualifying for a mortgage, avoiding the concern that your score will be negatively impacted.
Many brokers have dedicated underwriters at the various lenders who work closely with the broker to find possible solutions that overcome financing obstacles. These relationships also allow the broker to detail past issues with credit or income that could shed positive light on the application, leading to an approval. Underwriters like to understand the character of the applicants when making their decisions.
Brokers are able to offer their clients flexibility when meeting & communicating with their clients. Most brokers will arrange meetings outside of business hours (evenings & weekends) and some will meet at the clients’ house or work location. You’ll also find that good brokers can often quickly respond to after-hour questions/concerns via email or phone.
When selecting a broker, experience is key to a smooth transaction. Make sure that they are well qualified through customer reviews or a referral from a friend, family or real estate professional. Are they a broker or an agent (licensed brokers have additional industry training & minimum experience requirements)? Do they have an industry recognized designation? The AMP or Accredited Mortgage Professional designation is administrated through CAAMP (Canadian Association of Accredited Mortgage Professionals), the leading national mortgage association. In order to earn & maintain the designation brokers must complete a number of mandatory industry education credits annually that build their mortgage knowledge & ensure they are up-to-date on regulations.
The absolute best benefit about using a broker is that our services are usually free to the applicant. The lender chosen to fund the mortgage directly pays the broker a commission for their services. This is already built into the great rate the broker offered you. This why it is always in the best interest for the broker to find the best mortgage available for you because if the applicant doesn’t close the mortgage through the broker (decides to use their bank), the broker doesn’t get paid anything.
Darren Robinson is a Barrie mortgage expert, dedicated to offering the best mortgage strategies and provides personal assistance to help people qualify for difficult mortgages and loans. Call 705.737.6161