At Alberta Equity Mortgages, we get asked many questions about mortgage brokers and the advantages of using one. We have taken the questions which are frequently asked and have put together some answers. For specific information regarding mortgage brokers in Canada, please contact us.
A mortgage broker or mortgage associate as they are commonly referred to in Alberta, is a trained home loan specialist that works for you and not a particular bank or lender. Because of this, brokers have access to a multitude of home loan products from a variety of different mortgage lenders, banks and trust companies. This enables a broker to treat clients as individuals and find mortgage products that suit individual needs. Mortgage brokers have the most experience when it comes to home loans and will provide you with the best advice.
Lenders prefer to work with mortgage brokers because of the significant cost savings. Unlike big banks with large overhead due to full-time staff and branches in every neighbourhood, mortgage lenders let mortgage brokers do most of the work. Thus, saving on staffing and overhead allowing the lender to be more competitive with products and rates.
In Alberta alone there are many local lenders readily available including ResMor Trust, Firstline Mortgage, First National, MCAP, Bridgewater, ATB Financial, Scotia Mortgage and Macquarie Financial. These lenders are all reputable companies who have branches or offices in Calgary. These lenders prefer to work with the mortgage broker community exclusively and are extremely successful and competitive by offering unique and wholesale priced loan products.
A mortgage broker will match you with a specific lender based on your needs, not the lenders. Working closely with you, the broker can determine which is the best product, rate, term and amortization needed to quickly pay off your mortgage loan while saving you money on high interest charges. Mortgage brokers will also gather the necessary documents and information as well as answer the important questions throughout the home loan process. There are many details to be discussed when shopping for a mortgage. Mortgage brokers work for you to find the right solution.
A common misconception is that mortgage brokers cost money or charge fees. Mortgage brokers in Canada generally should not charge for their service since the lender already pays them. If a mortgage broker does charge a fee, its generally for commercial mortgages or for extremely unusual circumstances resulting in many hours of work by the broker to secure financing. Even then, many brokers will not charge in hopes of gaining loyalty and new client referrals. Although, some mortgage lenders may pay slightly higher commissions to try and entice a mortgage broker to bring the business to them. However, a mortgage broker generally gets paid the same amount no matter which lender is used.
Another common misconception is that mortgage brokers lend money. A mortgage professional that lends money is called a mortgage banker. Most brokerages are small firms providing expertise services and counseling rather than loans, so you won't find too many mortgage bankers in Canada. Unlike banks or bankers, a mortgage broker's job is to find the best product or the lowest rate, not to promote their own product or rate.