Popular Misconceptions about Mortgage Brokers
The banks look out for the best interests of the prospective-existing homeowner
Banks are in the business of generating profits for their shareholders so their products and, sometimes, their recommendations reflect those interests. Their clients, therefore, can become of secondary importance to profits and bonuses.
Getting the lowest interest rate is the most important thing to get from a mortgage broker
Focusing solely on a getting the lowest interest rate doesn’t necessarily equate to:
- Expert advice and ethical practices
- Quick turnaround of your application
- Having calls returned promptly
- Speedy problem resolution
- The best product for your situation
Getting a low interest won’t affect the level of service I receive from a mortgage broker
The interest rate you get is tied to a broker’s commission, so if they’re making a lot less money for a complicated process, it might mean:
- Reduced services and slower turnaround time
- Additional fees and charges for poorly explained services
- Delays or mistakes made on paperwork
- Not getting called back
- Problems being dragged out
We have a big down payment saved up so our credit rating isn’t that important
A good credit rating is essential for your mortgage application to be approved. To find out more about credit scores, please refer to our Financial Education section.
A mortgage broker’s background is of no importance to a prospective homeowner
Actually, your broker’s career history tells you a lot about their level of expertise and efficiency. Experience in related fields equates to immediate answers and informative examples. You’ll be more confident because you’ll know more and know what to expect. Learn more about your Money Coach, John Wright.
Once we’re set up for a mortgage, our finances are set and saving money isn’t really important
Paying your mortgage each month is only the first step. Setting up an emergency savings account, separate from your home expenses account, is essential to deal with the unexpected. Your Money Coach can teach you all about home budgeting to prevent disasters and overspending.
A mortgage broker’s primary job is just to get a good rate
Your interest rate depends on many factors: down payment amount, credit rating, incomes, length of term, etc.
A mortgage broker assesses your current financial situation and helps you decide on the best product and lender for your situation. They then negotiate the best interest rate and manage the application process. Finally, they deal with any issues that arise.
During this process, they stay in constant touch with you, keeping you aware of any developments.
Bank branch staff has the same knowledge level as mortgage brokers
Not generally. Bank employees are responsible for many different products and process much fewer mortgages than mortgage brokers. Therefore, brokers are more likely to be an expert simply by the greater amount of time spent processing applications.
To become an Accredited Mortgage Professional (AMP), mortgage brokers must study and pass an exam overseen by the Ontario government’s Financial Services Commission. Thereafter, any mortgage broker in good standing can become a member of the Mortgage Professionals of Canada association.
The value of using a mortgage broker backed by a well-regarded company is irrelevant
Beyond the in-house expertise and resources, a market-leading firm has the benefit of long-term, established relationships with: lenders, underwriters (risk assessors), home inspection professionals, and so on. Their system is streamlined, providing fast answers and turnaround so you get the home you want, quickly.
A well-supported mortgage broker provides greater flexibility and options to those with unique needs and circumstances. Pilot projects and special promotional rates are often made available.