This question is a very common one when looking to buy a home. Many clients are very loyal to their bank and feel they are getting the best rate simple by asking. It is important to remember that banks are in the business of making money, lots of it. Many do have attractive mortgage products but it can be difficult and time consuming for a home buyer to figure out which bank and what product is best for them.
A mortgage broker will take to time to find out what it is that you are needing in terms of a mortgage and will explain the various options you have around prepayment fees, ways to decrease the time to payoff the mortgage and other ways to save you money. They will also educate you as to what your obligations and responsibilities are in obtaining a mortgage.
One of the most important things that a mortgage broker can do it help you pre-qualify for a mortgage. This helps both the purchaser and the real estate representative to understand what is the maximum cost you can pay for your new home. It saves a lot of time in the long run by taking the time before you start looking at homes, that you may not be able to afford.
Mortgage brokers are regulated provincially so you can check with your provincial regulator on the website for the Canadian Association of Accredited Mortgage Professionals. This organization also has an online directory that can help your search for a broker.
Mortgage brokers, for residential mortgages, are paid their fee by the lender, not by the person who is using the mortgage broker’s service. There is no cost to the client.
One of the big questions for those looking for a mortgage is whether to go for a fixed or variable mortgage. While historically variable mortgages have had better rates than fixed mortgages, that’s not necessarily always the case. Your mortgage broker and help you understand and find the best product for you and your situation.
Be sure to ask all the questions you have and if you have concerns that are not answered, keep asking or get a second opinion. It is important to understand that whether you are securing a new mortgage, refinancing or just renewing your existing mortgage, to ask whether there are any legal or appraisal fees associated with the loan. These amounts vary from institution to institution. You do not want any last minute surprises.