What is the role of a broker?
A mortgage broker will first discuss their clientâ€™s needs and circumstances and then provide professional advice as to which lender and mortgage product best suit their situation.
There are many factors to consider when selecting a mortgage, and a broker will be able to ensure that all are carefully weighed before a decision is made. A broker will ensure that the consumer has a full understanding of their needs before proceeding.
A broker plays a major role in the completion and submission of the mortgage application and the supporting documentation required by the lender. The broker will advise the consumer as to what is required (employment confirmation, evidence of down payment savings, etc) and will then provide this material to the lender in order to obtain a mortgage commitment.
After the mortgage commitment is obtained, the broker will go through the commitment document with the consumer, explaining all of the pertinent information, terminology and conditions set out by the lender. Most brokers will help consumers (and first-time homebuyers in particular) to understand the various steps involved in satisfying any lender conditions, dealing with their solicitor, and other steps leading up to the closing of the mortgage transaction.
Things to look for in a broker
1 The AMP designation. The Canadian Association of Accredited Mortgage Professionals, our national industry association, confers this designation on mortgage professionals who have completed specified training, including a rigorous ethics program. The maintenance of this designation also requires ongoing education.
2 Established place of business. Brokers with an established place of business tend to demonstrate a longer-term commitment to their profession.
3 Access to a wide variety of lenders. Most mortgage lenders will only deal with brokers who have completed a registration process with them. We recommend that consumers ensure that their broker is able to conduct business with a full range of lending institutions.
4 Full-time brokers. We encourage consumers to look for a mortgage broker who works full-time in the business. A part-time broker may have difficulty keeping up with all of the offerings available and with other developments in the industry.
Nigel Aplin is the director of communications at MCAP, Canadaâ€™s largest independent mortgage and equipment financing company. The views expressed in this article are not necessarily those of KMI Publishing and Events Limited.
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On the contrary, a consumer who contacts a lending institution directly will be limited to the products offered by that institution. Lending institutions that accept business from mortgage brokers will often provide their best interest rates to their brokers. A consumer may not be offered the lenderâ€™s best rate without having to negotiate, and this may make many consumers feel uncomfortable.