A Quick Overview
So, what is a mortgage broker and why should I use one? Perhaps you are already familiar with obtaining broker loans. If not, this page may be a big help to you.
If you aren't, I'd like to enlighten you. My wife and I first started using this service years ago and have never looked back since.
When we lived in Dartmouth, Nova Scotia, we used Rod MacInnis from The Mortgage Centre.
When we moved to Lethbridge, Alberta, we used Sue Maier from The Mortgage Centre. (Hey if you get great service, why change.)
A good broker will save you time, money, and frustration.
If you are looking for different mortgage information just select any of the photo links below.
For the most part except for some special circumstances, they are free of charge and work on your behalf, not the bank. We personally never paid a cent for the service.
A good mortgage broker works for you, not the bank or another lender.
Their job is to find you the best interest rate and terms for you.
They "shop" many lenders and finds the best fit for you.
What is a Mortgage Broker?
Saving You Money
A good mortgage broker will find you a lower interest rate on your home loan than what you will probably ever find on your own.
The reason for this is, they shop your contract to many lending institutions. It creates almost a bidding war to obtain that loan.
If you go trotting off to your own bank, it is just you and the banker. Many of us feel small and powerless as the banker sits behind their desk and tells you their 3 or 5-year term rate.
They may or may not discuss options we may consider to save us more money.
They just assume and many of us do, that we have to accept that interest rate.
The mortgage we personally have now is locked in for a 5-year term at 2.99%. Neither of our 2 personal banks could even come close to that rate, at that time. Cha-ching! Mama can afford a new pair of shoes! :-)
Our mortgage broker(s), also took the time to explain several different options available to us and what we could realize in savings. Just going to bi-weekly payments as an example made a big difference.
Side Note: Sometimes if we compare one service with another, things can be seen more clearly. Lets look at the comparison of:
The Banker works for the Bank.
The Car Salesperson works for the Dealership.
The Mortgage Broker works for You.
The Banker's main job is to make the maximum income for the bank.
The Car Salesperson's job is to make the maximum income for the dealership and him or herself.
The Mortgage Broker's job is to look after their client (which is you), to save YOU money.
Note: There is absolutely nothing wrong with the Banker or the Car Salesperson. That is their job!
Does that help see the big picture? Do you see the difference? Great!
Let's face it, most of us are busy. Another big plus when you use a mortgage broker is saving you time. Why?
- We actually have never stepped into any of the buildings where our house loans were held. It may not even be in your area. It may be placed in a different city, state or province.
Remember, they are shopping the best rates and terms for you. Imagine trying to do that on your own!
Let's be real here. As much as I'm a big fan of mortgage brokers, they aren't doing this for free. Right?
Of course not. They are paid by the banks and other lenders that your contract is placed with.
The lenders pay this fee because they now have a loan in place, plus perhaps a repeat or lifetime customer.
Don't fret now, the lenders will still turn a profit on your business. This makes using a mortgage broker a win, win, win situation.
You win with better rates and terms.
The Mortgage Broker wins by being paid by the lender.
The Lender wins by making a profit from your loan.
Note: There are times when a mortgage broker may be paid by their client. This may be on a business type transaction as an example.
The one that may concern you might be if you just can't qualify at a regular lending institution, like a bank or a credit union.
If the mortgage broker has to go looking for say private funding because your credit has been bad in the past, you may have to pay a fee for their service. This will be disclosed to you before they proceed.
Probably yes. They are almost everywhere.
At the time this page was written, in countries such as Canada, United States of America, Australia, New Zealand and Spain, the majority of house loan transactions are handled by a mortgage broker.
I hope for those that aren't all that familiar with their role, that this page on "what is a mortgage broker" has been helpful to you.
For More Information about Mortgages
Select any of these photo links