Find The Best Mortgage Broker / Mortgage Specialist
You are looking to buy a home. This is an exciting time. But, there is always a catch, isn’t there? First, you need to know if you can afford the home you want and you also need to know how to find the mortgage that is right for you. How do you figure this out? Especially if you live in a large Canadian urban market, like Toronto, where house prices seem to never stop increasing.
Traditionally you would look for a mortgage specialist like a mortgage broker, or maybe call your banker, if you have one. These are traditional professionals that can help you understand how much you can afford and walk you through the mortgage process. If you have a strong relationship with your banker, perhaps you will prefer to work with them. Those of you that do this should understand that your banker can only show you the mortgages and rates that their bank offers. You will have to look around elsewhere yourself to see if your bank’s offering is best for you. This is where a good mortgage broker can help.
What is a Mortgage Broker?
A mortgage broker is an intermediary that pairs mortgage borrowers with lenders. Mortgage brokers are required to be licensed by their respective Provincial regulatory authority to deal in mortgages. They have an obligation to serve their customer’s needs. Mortgage brokers can help potential homebuyers get the best possible rate when securing a loan to buy a home. Instead of going to each lender for a rate quote yourself, a mortgage broker does the legwork for you. Brokers are compensated by fees paid to them by the lenders. However, note that in some cases, specifically with B or subprime lending, the broker may charge the customer a fee as well.
How Can a Mortgage Broker Help You?
The main advantage of using a mortgage broker is that the broker can scour the market to find you the best mortgage deal. This is the expectation, but please note the following; i) some brokers only deal with a select few lenders, meaning they won’t provide a thorough comparison of product alternatives, and ii) brokers may be financially incented to steer you to their favorite lenders. It is important for you to know that the broker you are considering does deal with most lenders in the market and you should also let them know that you expect to be shown options, not just the mortgage they recommend.
In their role, mortgage brokers act as an intermediary between you and the lender. The mortgage broker will assess your financial circumstances, the property you are interested in financing, and other relevant details to help determine which lenders may be a fit for your needs. Whether you’re borrowing for a new home or refinancing your current mortgage, a good mortgage broker will put together options for you to consider in an open and transparent fashion.
Once you have decided on the best option, the mortgage broker will collect all the required documentation from you and submit your application to the lender. The broker will answer the lender’s questions and liaise between you and the lender to get your application properly underwritten. When they do their job well, mortgage brokers can save you time and money.
How Do You Determine if They Are a Good Mortgage Broker?
Your mortgage decision is important, so if you decide to go the route of dealing with a traditional broker you need to make sure they are someone you can relate to and work with. Hopefully, they come recommended by someone you trust. If not, do your homework on them by verifying the following:
Are they licensed and in good standing with their Provincial regulatory authority?
Who are their typical clients? You want to work with a broker that deals with customers like you;
What is their availability? Are they easy to reach? Will they be available for calls after hours? Try to get a sense of how important you are to them;
How long have they been a mortgage broker? Experience matters;
Do they appear to be interested in what is good for you? Are they asking you about your specific needs and your long-term objectives?;
Check for online reviews of the broker. Check for reviews on Google, Yelp, or other services to see how others have felt about their service
If you have opted for a traditional broker, it is likely because you like to have a personal relationship with your broker and want to deal with someone you can meet and get to know. In this case, your comfort level with the mortgage broker is key so be sure they can deliver the personalized service and support you expect.
How Do You Find a Good Mortgage Broker?
The best way to find a good broker is a referral from a trusted source like friends or family. Be sure the referral is for a mortgage broker they have actually used and not just an acquaintance or friend that they may not know much about. Another source could be your realtor, who may have relationships with mortgage brokers that they can recommend. Otherwise, you need to do some research to find a good and trustworthy mortgage broker. If that is the case, look for online reviews and don’t settle on the first mortgage broker that you talk to. Interview at least three mortgage brokers to improve your chances of finding a mortgage broker that is a good fit for you. Make sure you understand how the mortgage broker operates, the mortgages and services that they have access to, their communication style, experience, and level of knowledge before you agree to deal with them. Remember this is all about you, not the mortgage broker.
Is an Online Mortgage Broker Right For You?
If you are not interested in face-to-face meetings, long phone calls, and the interpersonal relationship required with a traditional broker, an online broker may be the answer for you. All online brokers are different, and some offer more service than others, but they all allow you to start the mortgage application process online without having to rely on a traditional broker to do that for you.
If you are a self-starter, are comfortable with technology, and looking to have a little more control over the application process, then an online broker, like www.frankmortgage.com, is right for you. Here you can provide the personal and employment information that lenders require in a secure and confidential online environment and upload all the documents to a secure online portal. Information is encrypted and protected with the latest security software.
The traditional broker may provide some of the online elements but if they are asking you to email documents or provide personal information via email or over the phone, your information is being transmitted in an unsecure environment. This is your most personal financial information, and you should want to ensure it is secure and handled confidentially. The best mortgage broker for the modern borrower is an online mortgage broker using sophisticated technology to manage and protect client mortgage applications.
Not only will the best online mortgage brokers be safe and secure they will also be more open and transparent regarding educational tools and mortgage product information. Mortgage guides, educational tutorials, and mortgage calculators are all easy to access online and will be available at the best online mortgage brokers for you to independently review and use to educate yourself. Isn’t the sense of autonomy that this grants you as a borrower appealing? You don’t need to rely on a person you had never previously met to provide you with information – you can access it yourself, at your convenience. Not only will the fintech of the future provide ease of use it will also empower borrowers to control their own financing process in a way that traditional methods cannot.
Conclusion
Now with fintech making inroads in Canada, we will also see automated pre-approvals, open marketplaces, and fully virtual processes. Why would younger, tech-savvy borrowers use traditional methods to find their financing? Neither a branch visit nor a broker interview can match the customer-friendly, easy-to-use fintech applications available today.
Traditional brokers will continue to serve customers that desire the personal relationship. They are not going to disappear, but they will need to offer excellent service and a compelling proposition to fend off the new fintech entrants.
While some online mortgage brokers may still behave a bit like traditional mortgage brokers, Frank Mortgage is modern technology built specifically for the borrower’s needs, not the brokers or lenders. At Frank Mortgage you can see what the mortgage market has available to you, openly and transparently, with no broker bias steering you to a conclusion. You are empowered to make your own choice. Go to www.frankmortgage.com and get control of your financing.
Don Scott
Don Scott is the founder of a challenger mortgage brokerage that is focused on improving access to mortgages. We can eliminate traditional biases and market restrictions through the use of technology to deliver a mortgage experience focused on the customer. Frankly, getting a mortgage doesn't have to be stressful.
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