Getting ready to purchase a property in Canada is a thrilling experience. Whether done through a mortgage or paid for by cash, this life-changing decision can also be exhausting, but maybe less of a hassle if you seek the services of a mortgage broker. These professionals serve as middle persons, linking the borrower and lending institution to ensure the process goes well.
Before using the services of a mortgage broker in Ontario, read this article first to arrive at an informed decision as it’ll run you through the pros and cons of hiring these professionals for a seamless mortgage application experience.
Advantages Of Having A Mortgage Broker
The need for mortgage brokers may hinge on your specific status as a borrower. Here are some of its pros:
1. Better Access To Loan Products
Part of a mortgage broker’s job is to stay in contact with various lending institutions in Ontario and establish relationships with them. Because of this, they have overall better access to loan products, some of which may not be publicized. Being familiar with the industry, mortgage brokers in Guelph may be able to link you with reputable firms you may not have thought of approaching for your application. Most importantly, this professional can help keep you away from one-sided deals.
2. Better Mortgage Rates And Terms
Trained to have good negotiation skills and able to enjoy volume discounts, it’s possible to get better rates with the help of a mortgage broker. Mortgage lending will likewise involve out-of-pocket costs such as origination, appraisal, application, among other fees. A mortgage broker may be able to request the lender to waive some fees on your behalf.
Having established relations with lending institutions, these professionals are capable of getting you better mortgage terms and rates. You definitely won’t have the same privilege if you’re doing the negotiations on your own.
3. Saves Time And Costs
In most cases, banks and lending firms rely on mortgage brokers to conduct pre-screening of property buyers, helping them with the process. This helps reduce the overall cost and time needed for the application.
Instead of going to and from one lender to another, a mortgage broker simplifies the procedures for you. All you have to do is submit the documents needed for the mortgage pre-approval and application. Brokers may even take charge of obtaining some documents on your behalf.
4. Helps Applicants With Unique Situations
Most brokers are adept in dealing with mortgage applicants with problematic cases. Whether you have a low credit score, a freelancer, or have other issues, a mortgage broker is necessary to assist you. Professionals from https://certifiedmortgagebroker.com/kitchener/ and other reputable services can think of the best loan product for you based on your situation. They’re able to provide professional advice on how to make sure your application is considered despite your situation.
Disadvantages Of Having A Mortgage Broker
While having a mortgage broker could be beneficial, it has its drawbacks as well. Here are some of them:
1. Some Banks Don’t Work With Brokers
In some instances, lending firms may only offer their loan products directly to home mortgage buyers, following the 2008 housing crisis where many of the mortgage broker-backed lenders weren’t able to pay for their loans on time.
If such is the case, you’ll have to do the application on your own. If you’ve chosen a particular lender, ask if they work with mortgage brokers before contacting the latter.
2. You May End Up Paying More
Mortgage brokers can’t guarantee the rates when they first present them to you, and these figures are just good faith estimates. The broker considers these rates will apply up until the mortgage is closed, but lenders will have the final say and can make changes at any point of the transaction. This means you may be asked to pay higher rates or additional costs.
3. Brokers May Have A Different Motivation
As a mortgage applicant, it’s in your best interest to find the best deal and to look for a loan product with the lowest rates and the best terms. While it may appear like your mortgage broker is your best shot at achieving this objective, it may not always be the case.
Brokers are typically paid for by the lender or bank, and their rates vary. Generally speaking, the bigger the mortgage amount, the higher the commission rate. This could mean brokers might try to talk you into applying for a deal to maximize their proceeds.
Bottom Line
Having a mortgage broker doesn’t mean you have to slack off because there’d be a person taking care of your responsibilities. With or without a broker, you should have done your homework by comparing rates and ensuring the broker you’re planning to work with is an authorized professional. Knowing the pros and cons of using mortgage brokers could help you in your decision.