There are generally two ways to get a mortgage in Canada: From a bank or from a licensed mortgage professional. So should you use a bank or should you use the services of a mortgage professional, commonly referred to as a Mortgage Broker?

What is a mortgage broker?
There are still a lot of misconceptions and misunderstandings out there when it comes to mortgage brokers and what they do.

A mortgage broker is a professional who is licensed with the Real Estate Council of Alberta (RECA). In order to obtain this credential, a mortgage broker is required to meet educational and professional conduct requirements, and complete background security checks. 

How is a mortgage broker different from a bank?
A mortgage broker should never be compared to your local bank which offers the products of only their particular institution. The purpose and function of each is very different. An independent mortgage broker is just that “independent”, meaning they have no association with any one lender. That means it's their job to offer you unbiased advice.

Essentially, they're experts who are trained and licensed in the business of mortgage financing. Their primary function is to work for you, not the lender! Licensed mortgage professionals send millions of dollars in mortgage business each year to Canada's largest banks, credit unions, trust companies, and financial institutions; offering their clients more choice, and access to hundreds of mortgage products! As a result, clients benefit from the trust, confidence, and security of knowing they are getting the best mortgage for their needs.

While shopping the mortgage market for the best rate, term, and product for the consumer, mortgage brokers also offer more than this, providing debt consolidation solutions and credit recovery strategies. Best of all, a mortgage through a broker operates in the same way as the one you would get through your local financing institution. Online banking, accelerated payments, and pre-payment options are all available. It's easy and hassle-free.

MYTH#1: Interest rates through a mortgage broker are high.
TRUTH: The industry's lowest interest rates are only available through a mortgage broker.

Why should I use an independent mortgage broker?

It pays to work with a broker who will represent your interests and ensure the mortgage you get is the one that's best suited to your needs. Mortgage brokers have direct access to major lenders across Canada. Whether it's a chartered bank, trust or insurance company, or private lender, each offers different rates and product features. Most important for you to know is that many of these lenders are only accessible through a mortgage broker. You will want to ensure you get the one that's right for you.

Once you have decided where to apply, obtaining mortgage approval is often dependant on the way your application is presented and who it gets sent to. A mortgage broker is trained to present your application so it will get an immediate, positive result. The turnaround time for a broker to get a response from a lender and secure you financing can be within just 1-3 days or hours, depending on the workload of the lender.

Who pays the mortgage broker?
Mortgage brokers get paid a "finder's fee" for residential mortgages from the lender once the deal has been completed and funded. Therefore, most brokers do not charge clients for their services. To ensure there are no misunderstandings, make sure you ask your mortgage broker upfront if the lender will be paying their fee.

MYTH #2: A mortgage broker only deals with people who have bruised credit.
TRUTH: Whether you have good credit or poor credit, a broker can be a valuable asset.

Independent statistics tell the story... the use of mortgages brokers continues to grow in leaps and bounds each year as people get a better understanding of what they do.

If you're considering using a broker, ask your neighbours or friends if they have dealt with Shawn Selanders in the past. Call Shawn to introduce yourself and get to know the broker you've selected. Ask Shawn how he goes about finding a mortgage and his professional options of the many lenders he deals with? If you do not wish to obtain a lower rate or better product from your favourite bank, can Shawn negotiate a better rate there so you can still deal with your mortgage rep?  If you're a busy person, ask if they will come to your office or home to talk about what the many lenders offer. Most importantly, ask to review your current financial situation as well as your credit bureau. 

Remember, going through a big bank that offers you only one "posted" rate or requires you to “negotiate” a lower rate, could cost you thousands of dollars. Why shell out extra money when you don't have to?

Whether you're purchasing a home for the first time, taking out equity from your home for investment or pleasure, or your current mortgage is simply up for renewal, it's important that you are making an educated buying decision with professional unbiased advice.

Who Should Use a Mortgage Broker? Everyone!

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