Finding the right mortgage broker in Vancouver
5 November, 2018 / by Glenn Carter
A mortgage broker is supposed to work on your behalf to secure the mortgage financing you’re looking for when purchasing a property, renewing your mortgage or refinancing your mortgage. Your broker plays an important role in the home-buying process. He should assess your finances and help present you with the mortgage financing option best suited to your needs.
Today, a mortgage broker in Vancouver is so much more than an intermediary. Here are some of the important duties your broker may do:
- Capturing a snapshot of your finances
- Making mortgage financing recommendations based on your individual needs
- Submitting a mortgage application to the lender on your behalf
- Negotiating with the lender on your behalf
- Working closely with your real estate agent and lawyer
If you’re looking to invest in the Vancouver real estate market, now is a perfect time.
But there’s no need to panic. The fundamentals remain strong for the Vancouver real estate market. Vancouver is seen as a world-class city. However, with an average household income of $93,520 and an average value of primary real estate of $1,514,621, affordability remains a challenge for locals. That being said, Vancouver remains an attractive real estate market for investors looking for yield.
The Vancouver real estate market has faced a number of headwinds in recent months – an increasing rate environment, the mortgage stress test and new taxes from the B.C. government – have all led to the slowdown. However, the effects of these headwinds are mostly expected to be short-lived.
These temporary headwinds present an excellent buying opportunity in the Vancouver real estate market for investors. With Vancouver’s journey towards becoming a world-class city only beginning, there remains a lot of long-term potential for real estate investors who can afford the higher home prices and are in it for the long haul.
To be clear, brokers also work closely with big banks—CMI, for instance, works very closely with TD and Scotiabank—however they also have access to other lending solutions like private mortgages, trust companies, and monoline lenders.
Alternative mortgage options in Vancouver
The primary reason most Vancouverites choose to partner with a mortgage is broker is access. Mortgages brokers have access to dozens of mortgage products that the big banks simply do not.
Consider private mortgages. With the rise in mortgage restrictions across Canada, consumers have been looking for creative ways to finance their home purchases. Many are turning to private financing. Simply put, this is a home loan offered by an individual or company other than a bank or traditional finance provider.
Brokers also have access to second mortgages. This is a great tool for funding renovations, consolidating debt, accessing investment funds, or a bridge loan.
Also, brokers have access to home equity lines of credit (HELOCs)—another popular mortgage product residents of Vancouver look for. Given the massive increase in real estate values across Vancouver, residents are looking for ways to access their capital. With a HELOC, a broker can give you access to up to 80% of your current equity in your home.
Non-resident mortgages in Vancouver
Mortgage brokers in Vancouver can also solve the problem of many non-resident home buyers. There are certain rules and guidelines that foreign buyers must adhere to, and lending options are much different than for Canadian citizens.
For instance, the down payment is often much higher and qualifying for the mortgage financing is much more involved. This is why it’s extremely important to partner with a Vancouver-based mortgage broker who is familiar with the intricacies of non-resident mortgages in Canada.
Role of a Vancouver mortgage broker
Your mortgage broker in Vancouver has the important role managing the steps along the way to ensure your mortgage is successfully funded.
After your broker has sent in your mortgage application, the lender should underwriter your file. The underwriter may have additional questions or need further documentation. Your broker should field the underwriter’s questions and try to manage your file the best he can on his own without getting you involved.
There are plenty of choices in Canada when it comes to mortgages. There are the names that you probably know quite well – the big banks and credit unions. Then are lenders that just deal in mortgages through the broker channel. These lenders are known as monoline lenders and quite often offer mortgages even more competitively than the big banks.
The mortgage industry is an industry that has seen its fair share of changes in the past several years. As such, you’ll likely want to partner with a mortgage broker in Vancouver who eats, breathes and sleeps mortgages, so he can help you choose the mortgage product that makes the most sense for you.
You’ll want a broker who’s knowledgeable and can explain mortgages in layperson terms, so you can make an informed decision and ensure you’re getting good value for the services you’re receiving.
Interviewing a mortgage broker
Buying a home is most likely the single biggest financial transaction of your lifetime, so you’ll want to make sure that you choose a mortgage broker in Vancouver who knows his stuff. For example, if cash flow is the main concern for you, your broker should recommend a mortgage product that provides you with the lowest mortgage payment possible.
When you’re meeting with a mortgage broker in Vancouver for the first time, it’s best to come prepared with a list of questions. Here are some good questions you can ask at your initial meeting.
- Can you please provide some testimonials from clients you’ve recently dealt with?
- How long can I expect it to take for my deal to close?
- How long have you been in the industry as a broker? Do you have any prior industry experience?
- How many mortgages did you fund last year?
- What are the steps involved in the mortgage application process?
- Are there any requirements I need to be aware of when applying for a mortgage?
- What can I do to make my mortgage application the strongest it can be with lenders?
Working with an adaptable and flexible mortgage broker
When working with a mortgage broker in Vancouver, you should be kept in the loop about what’s going on. If you’re anything like us, you’ll want a broker who provides you with regular updates and lets you know what’s going on.
A mortgage broker in Vancouver may need to be a little more creative and resourceful than other real estate markets, as affordability tends to be a challenge there. That’s why you’ll want to choose a broker who’s experienced and will work hard on your behalf to find a lending solution best suited for you.
If your credit score has room for improvement, your broker can help come up with a game plan to get your credit in better standing and get you the best mortgage financing options possible.
Your Vancouver mortgage broker is there to support you. If you have any questions along the way, don’t be shy about phoning him up and asking for clarity. He’s there to serve you and look out for your best interests.