Frequently Asked Questions
Who is a mortgage broker?
A mortgage broker is an individual who acts as the link between lenders and homebuyers/investors.
What does a mortgage broker do?
A mortgage broker works to find a client not only the best possible mortgage rate, but also a product that is beneficial and fitting to their personality, lifestyle, and goals.
What is a mortgage brokerage?
A mortgage brokerage is a licensed business that is able to carry out activities relating to mortgages, such as arranging one for a client. A mortgage brokerage employs several mortgage agents and brokers who are able to carry out business on its behalf. It is a mortgage brokerage’s responsibility to ensure that their brokers and agents are fully licensed and follow regulatory principals.
What’s the difference between a mortgage broker and a “specialist” at the bank?
A mortgage broker is fully licensed and regulated under several boards such as CAAMP and FSCO. Through these boards, a mortgage broker vows to a strict code of ethics and best practices. A Mortgage “specialist” at the bank does not carry any licenses, and is essentially an employee of the bank who enforces, protects, and guards their interests. A mortgage broker is not an employee of any individual lender; therefore we work for you, and not the bank.
I heard banks have the best rates and are unbeatable. Is this true?
The answer to this is NO. This question is a common misconception that homebuyers have. What homebuyers often do not realize is that there are many other lending institutions that compete with banks. In order to remain competitive, they often lower their rates to an extent which banks are not allowed. However, the only way to get access to these other lenders is through a mortgage broker.
How can these other lending institutions afford to beat bank rates?
These smaller institutions often do not have large local locations in every city or town. This means that they do not have to pay as many employees, landlords, bills, etc. The overhead is significantly smaller, and they usually specialize in only one thing; mortgage lending. All this extra saving is reflected in their rates, as they can afford to bring them down.
Is there an associated broker fee, application fee, or hidden cost with using a mortgage broker?
Absolutely not! A client never directly pays a mortgage broker for their services. The lender arranges the compensation for services.
For additional answers to many more questions you may have, it is recommended that you read the complete “Mortgages 101” section of this website.
For a more in-depth and professional review of your individual and personalized situation please give Harpreet Singh The Mortgage King a call at (416) 795-1919.