What is a mortgage broker?
First, let’s tackle the question: What is a mortgage broker?
Similar to your real estate agent and real estate lawyer, a mortgage broker is an expert in the home-buying industry. While a bank offers its own suite of products and services, a mortgage broker can tap into a network of lenders, ensuring the best mortgage and rate for your personalized needs. For a bank, that practice would be akin to going to its competition to get a better deal. It just wouldn’t happen.
“People think you go to a mortgage broker when you have bad credit or the bank won’t give you a mortgage,” says Paula Scott, a licensed mortgage broker and founder of Best Rate Financial, a brokerage that sits under The Mortgage Centre, an established mortgage brokerage network. But she thinks more people should seek out the advice of a mortgage broker before heading to the bank. “We have more experience and education, our services are free.” And mortgage brokers have access to multiple lenders, too.
One of the biggest advantages of going through a broker, according to Scott, is personalized attention. “We review the applicant’s information, find out their short- and long-term goals, compare mortgage products, and ultimately place them with a lender that has the most favourable rate with the most favourable mortgage conditions.”
That’s great if your situation is unique, like if you freelance for a living, for example. But even if your situation is pretty typical, there are a variety of benefits a mortgage broker can offer that you won’t necessarily find at a bank.
Now, what qualifications does a mortgage broker have?
Across Canada, it is regulated that everyone who deals or trades mortgages to be licensed. In Ontario, for example, it is covered under the Mortgage Brokerages, Lenders and Administrators Act.
There are two types of people you might deal with at a brokerage: A mortgage broker and a mortgage advisor.
Regulations vary from province to province. But in most cases, mortgage brokers are required to have been licensed as a mortgage agent first, and for a set period of time, before applying for a mortgage broker licence. They are also required to have successfully completed an approved training course and exam. Mortgage agents, on the other hand, work under the supervision of a broker and are not required to have the same level of education to carry out mortgage activities.
Where to find a mortgage broker
Since a mortgage broker’s services are free, and you’re not obligated to move forward if you decide to walk away, there’s virtually no downside to meeting with one. Ask your real estate agent or your friends and family for referrals. You can also scour the internet to find brokerages near you (as well as the best rates). Be sure to read reviews and check out ratings with the Better Business Bureau. Once you’ve found a broker, set an appointment to meet and discuss your needs.