Posted by:Aleksandra Oleksak
Brennan Valenzuela from RateHub is back this month for our monthly guest post swap. Last month Brennan answered our FAQ’s on the new mortgage rules, if you missed his post, just click here. While I discussed the merits of choosing to live in a house vs condo, click here to read that post.
Today Brennan is discussing mortgage brokers. With the popularity of using mortgage brokers versus traditional banks on the rise, it’s important to be informed and ask the right questions. Just like with any profession, there’s good and bad, so it’s important to be educated before sitting down with any mortgage specialist. Brennan gives us 5 questions to ask a mortgage broker to help us get started on our mortgage journey…
Are you using a mortgage broker? Because according to research conducted by the Bank of Canada, Canadians who use mortgage brokers pay lower mortgage interest rates by an average of 0.175%, compared to those who use banks. For example, if your bank advertises a 5-year fixed rate of 3.15%, then a broker will be able to get you 2.98%. How do you find the right mortgage broker? Here are five simple questions both experienced and first-time home buyers should ask to ensure they get the right mortgage broker by their side.
1. What kind of education/licensing do you have?
You must ensure that your broker is fully licensed and has the proper training that meets mortgage practice standards. Most mortgage brokers in Canada require a license for their practice; however, licensing differs from one province to the next. For example, Ontario mortgage brokers must meet education and experience requirements outlined by the Financial Services Commission of Ontario (FSCO).
Although not mandatory, mortgage brokers can receive an Accredited Mortgage Professional (AMP) designation through the Canadian Association of Mortgage Professionals (CAAMP) which increases their credibility.
2. What are your hours of availability and how can I reach you?
Unlike bank reps, mortgage brokers operate independently which affords them extended business hours for increased reachability. A good agent will also maintain communication with you even after you have closed your home to provide timely updates and mortgage news.
3. Are you affiliated with any lenders?
It’s not a good sign if your broker is sourcing mortgage products from only one or two lenders because it limits the amount of options available to you. Ideally, you would like a mortgage broker with access to mortgage rates and products from multiple lenders for a greater diversity of selection.
4. How long have you been a mortgage broker?
An experienced mortgage broker is a good mortgage broker. They are less likely to be caught ‘off-guard’ by a unique situation because they would have already dealt with it before. Ask them about their years of service and the number of deals they’ve closed. Most mortgage brokers wear their accomplishments like medals.
5. What do you love about your job?
Finally, you want to gauge the level of passion your mortgage broker has about their job. Is there fire in their eyes when you talk to them? Do they have strong opinions about the mortgage industry? Are they confident about how they can help you? A good mortgage broker will have all of the above.
Thanks Brennan, I think these are some solid questions that everyone should be asking! Which option is your top choice for arranging a mortgage, a bank or mortgage broker? Brennan and I would love to hear from you!
See you next month Brennan!