How to Choose a Mortgage Broker.
How to Choose a Mortgage Broker?
There is a difference between a teaser rate and a rate that you can qualify for based on your income and credit profile. If you are asked by your mortgage agent or mortgage broker to complete an application and to provide supporting documentation, it’s to help you. We promise you that spending the extra 10 minutes on the phone and digging through your filing cabinets is the best 10 minutes that you can spend when it comes to your mortgage journey.
What is a Mortgage Agent and Mortgage Broker?
A Mortgage Agent or Mortgage Broker operating in the province of Ontario must be licensed and regulated by the Financial Services Regulatory Authority of Ontario (FSRA). A Mortgage Agent or Mortgage Broker by-law must only work for one Mortgage Brokerage. A Mortgage Brokerage must have a Principal Broker who is ultimately responsible for the overall compliance and operations of the Mortgage Brokerage. When a Mortgage Agent has a minimum of 2 years of experience, they can enroll in a Mortgage Broker course provided by a regulated and approved education provider such as Mortgage Professionals Canada.
Is your Agent or Broker Licensed?
One of FSRA’s mandates is to promote consumer confidence and protection. Therefore, it is easy for you to determine if the individual that you are speaking with is licensed to deal and trade in mortgages. By clicking here you can verify if you are dealing with a licensed Mortgage Agent, Mortgage Broker, and Mortgage Brokerage.
Once you have determined that your Mortgage Agent or Mortgage Broker is licensed and in good standing with their respective regulator, you will want to ascertain the following:
- How many years has your Mortgage Broker been licensed, or has industry-related knowledge and experience? It is important to note that the number of years licensed should not be the basis of determining if you should work with a mortgage agent or mortgage broker. Some very skilled financiers might have only recently obtained a license or have worked previously in a position where they did not require a mortgage license, for example, underwriting for a mortgage lender. Therefore, you should be more focused to learn about their mortgage experience.
- Is Mortgage Brokering their primary profession? Not all Mortgage Brokers operate on a 24/7 basis, therefore it’s important to have an understanding of the time and attention that you will be receiving. Responsiveness and speed are some of the most critical components of a successful mortgage transaction.
- Does your Mortgage Broker have experience with the product you are seeking? For instance, has your Mortgage Broker been successful with arranging a mortgage to stop a power of sale if you are currently in the legal process? If you are seeking a commercial mortgage, does your Mortgage Broker have access to commercial lenders and can they accurately present your financing needs to respective commercial mortgage lenders?
- Does your Mortgage Broker have access to more than one mortgage lender and product? When you deal with a bank representative, they are simply employees of the bank and attempt to sell you their one-item menu. In this respect, this places you at an incredible disadvantage when you think of it. Your Mortgage Broker will have access to multiple lenders, with multiple products. This will allow your Broker to seek, compare, and negotiate with mortgage lenders on your behalf.
- Have you been asked to provide your Broker with an upfront fee? According to the Mortgage Brokerages, Lenders and Administrators Act (MBLAA) an Agent, Broker, and Brokerage cannot ask you to provide an advanced payment or deposit before you accept a mortgage agreement or renewal if the mortgage is for $400,000 or less. If the loan amount is greater than $400,000 you might be required to provide what is known as a retainer or a good-faith deposit. This retainer is intended to cover any out-of-pocket expenses that are often associated with transactions with a higher level of complexity or a greater resource requirement.
- Have you been provided with a Disclosure to Borrower at least 48 hours before being presented with a Mortgage Commitment or Mortgage Renewal? Furthermore, have you received a copy of a Disclosure of Material Risks, and do you feel confident that you have received all material information to help you decide if the loan being presented is suited to your needs and circumstances? You may opt to waive the 48-hour cool-down period by doing so in writing. You should use this opportunity to review the disclosure to the borrower and other loan-related documents and disclosures. If you have any questions, these should be presented to your Mortgage Broker and/or real estate lawyer.
- Have all fees and costs related to the mortgage been disclosed in writing to you at the earliest opportunity? Avoid estimates, verbal quotations, and starting from’s. You should be provided with clear evidence as to all of the fees associated with obtaining the mortgage. If you are still at the most preliminary stages of mortgage shopping, you might not even own property yet, your Mortgage Broker should be able to provide you with sound information and advice relatively quickly.
- Is your Mortgage Agent or Broker using clear and concise language without the use of confusing jargon? Hey, sometimes shop-talk comes to the surface by a slip of the tongue, for instance, we might use the phrase ‘LTV’ instead of saying ‘loan-to-value’. However, if you are truly confused with the information being relayed to you, and do not receive clarity when requested, you should let go of your pen. You must understand the terms and conditions before entering into any mortgage contract.
In life, a quick answer is not always the correct answer, and when it comes to your mortgage, it is for sure never the correct answer. There is no such thing as shortcuts when it comes to finding suitable mortgage solutions. Hard now, easy later, folks! We hope that you have enjoyed our article on how to choose a Mortgage Broker and invite you to contact us anytime.
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