5 things you need to know about mortgage brokers in Ontario
10 December, 2018 / by Glenn Carter
Are you looking for a mortgage in Ontario? Your local bank may be a good first stop, but it shouldn’t be your only stop. If you want a truly unbiased opinion on mortgages, be sure to give a mortgage broker a phone call.
A mortgage broker acts as an intermediary between you, the borrower, and the lender. A broker can help you whether you’re looking to purchase a home, or renew or refinance your mortgage. A mortgage broker deals with dozens—or more—of lenders from banks to credit unions to private lenders. Your broker can help you find the best mortgage product and save you money in the process.
A mortgage broker is often seen as a middleman of sorts, but they do a lot more than you may think. Here are some of the duties and tasks your broker should do:
- Assessing your personal finances and credit advice
- Making recommendations for mortgages based on your financial needs
- Preparing your mortgage application for the lender and collecting the needed documents along the way
- Negotiating with the lender on your behalf to help you save money
- Work with your real estate agent and lawyer
When you’re working on a tight timeline an experienced mortgage broker can help ensure the lender signs off on all the necessary conditions so that you can sign the financial waiver with confidence. At a bank, the person handling your file only has access to one lender—themselves. Whereas a broker has the flexibility of choice, which means you have the flexibility of choice.
Mortgage brokers in Ontario
If you’re buying in Ontario, you’ll want to find mortgage brokers in Ontario. With a population of over 13 million, Ontario is Canada’s most populous province. It’s also the second largest province in size, second to Quebec.
If you’re looking to invest in real estate, southern Ontario has a lot of opportunities. While housing markets like the GTA are pricey, markets like Kitchener-Waterloo and St. Catharines remain affordable with a good opportunity for price appreciation in the coming years. MoneySense named several Ontario cities as the top cities in Canada to live in. Be sure to check out its list before investing.
As you’re considering your financing options, here are five things you need to know about mortgage brokers in Ontario.
Your broker deals with many lenders
When you go to the bank, they can only offer you the mortgage products that they have. They aren’t likely to tell you to go down the street to its competitor. You really have to do your homework to make sure you’re truly getting the best deal.
Meanwhile, mortgage brokers in Ontario deal with dozens of lenders. A broker often deals with many of the lenders you’re familiar with—the big banks and credit unions—as well as monoline lenders that operate in one line of business, mortgages, and deal strictly with brokers.
By not using a broker, you’re likely doing yourself a disservice. There could be a better option out there for you, but you won’t know unless you speak with a broker and see.
Your broker’s services are free
Your mortgage broker likely won’t charge you a fee for their time. In most cases, their services are completely free. You’ll get unbiased advice at no additional cost to yourself. There are times when a broker will charge the borrower, but a broker will be upfront about that eventuality if that is the case.
Sounds too good to be true? It’s not. In most cases, your broker is compensated directly by the lender. Good mortgage brokers in Ontario should put you with the best mortgage product regardless of the finder’s fee being received.
In some cases, you may have to pay a fee—if you have bad credit or you’re buying a sub-prime property—but it’s probably worth it since your broker can probably find you a lender that will approve your mortgage, whereas the banks might turn you down.
Your broker should protect your credit score
When you work with mortgage brokers in Ontario, in most cases they’ll pull your credit score and report once or twice. This is likely to only have a negligible impact on your credit score, thus protecting your credit.
However, when you apply for a mortgage at several lenders yourself, each time you apply, the lender will likely pull your credit. This could result in you lowering your credit score. This is the last thing you want to be doing when you’re applying for a mortgage.
Lower mortgage rates
Options give you opportunities to save, and brokers give you options. Do you want the best deal on your mortgage? Who doesn’t? While rates aren’t everything, getting a lower rate certainly helps you save money on your mortgage (provided the other terms and conditions are favourable).
Mortgage brokers in Ontario oftentimes have access to mortgage rate specials not available to the general public. By dealing with a mortgage broker, you may even be able to find a better rate with your own bank. You won’t know unless you give a mortgage broker a call.
Do you like meeting during banker’s hours? Me neither. Unlike the bank, which sets strict hours, many mortgage brokers work flexible hours with some even offering e-signature options. You can often set an appointment that works for you, oftentimes from the comfort of home. It doesn’t get any easier than that.
These are just five of the many things you need to know about working with mortgage brokers in Ontario. By working with an experienced mortgage broker, you’re more likely to find the mortgage product best suited to your needs.