The Top 5 Myths About Mortgage Brokers The role of a mortgage broker in the lending process is often poorly understood, despite the fact that their services are utilized by many. Truthfully, the benefits of bringing a mortgage broker onto your team of real estate professionals as you undergo the mortgaging process are numerous-contrary to the popular myths that tend to circulate about the profession. We’re here today to debunk the five most common myths about mortgage brokers, what they do, and how they function within the homebuying process.
Myth #1: You need to pay to work with a mortgage broker. Generally there is no cost to the home buyer when they choose to recruit a mortgage broker. Instead of being paid by their clients directly for their services, a mortgage broker is paid via commission by the lender that they are working with on your mortgage.
Myth #2: You only need a mortgage broker if your credit is poor. Because of the insider knowledge and connections that a mortgage broker has within their business, they can certainly be a flexible and friendly solution for those whose credit needs some work. But any person of any credit rating could benefit from the services that these individuals and broker networks provide. Nobody is too wealthy to not want to save money and time, as people often do when they work with a mortgage broker.
Myth #3: Mortgage brokers work for the lenders. First and foremost, a mortgage broker works for their client: the home buyer. Their job is to shop around for lenders that will work with you at the best possible rate, so they have no “loyalty” to a particular lender. While the lending institutions are the ones who pay a mortgage broker with a commission, the broker only gets this payment if you choose one of the lenders that they suggest to you.
Myth #4: My bank will give me the best rate, so I don’t need a mortgage broker. If you are referring to a traditional lending institution like a bank to obtain a mortgage, you can’t expect that they would ever be able to tell you if someone else is offering a better rate for what you want. A mortgage specialist at a bank will be able to guide you along the journey, as long as you choose from one of the options that their institution provides. A mortgage broker, on the other hand, has the access to numerous lenders that enables them to shop around on your behalf to find the best terms and rates in your quest for homeownership.
Myth #5: A mortgage broker can’t help me because I have a poor credit history. Many mortgage brokers actually specialize in helping those who don’t have exceptional (or even good) credit ratings. Their connections to numerous private lenders allows them to find the best rates and terms that will work for your unique situation regardless of your credit score. Second mortgage in Toronto, refinance, and many other products. When you seek out one or more individual lenders without the help of a mortgage broker, you might find that your options are limited or nonexistent unless you have stellar credit. Your broker, however,
can negotiate with the lenders that they have access to and take your life circumstances into account as they try to find you the best rates possible. More and more Canadians are opting for the invaluable assistance of mortgage brokers as they set out on their homeowning journeys-whether it’s their first time or they’ve done this dance before. If you learn beyond the myths of what mortgage brokers do for a living, you too can see why, perhaps, you should bring one onto your team when you take out a mortgage.
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