Why should You Consider Using A Mortgage Broker Specialist In Mississauga

Consider a circumstance, where you have made an offer on a property you wish to purchase and it’s been accepted. Alternatively, you may have decided to do a basement renovation and spruce up your current home with an expansion or a new bedroom. You may even be in a position where you need to renew your current mortgage with your existing lender and need advice on what the best rates are given your unique circumstance. So, what are your options? Do you need a home equity loan – or – do you need a second mortgage? What are the mortgage refinance rates, that are tailored to your personal situation?

In the not so distant past, if you needed a mortgage or anything related to borrowing on your home, you just had to stroll into your local bank. Many of us then took the word of the bank representative as the word of gospel without question. In most cases, these bank representatives can only offer you a cookie cutter solution that applies to all individuals that apply for a loan at their bank. Usually, these are younger folk who have not trained as certified mortgage agents and have limited lending experience in Mississauga Ontario.

It is then imperative to do your homework where weighing your borrowing options are concerned. Most banks cannot offer clients a wide roster of mortgage options, in the event  you have lost your job or have a blemished credit rating. Where the best mortgage interest rates in Ontario are concerned, one institution cannot be the lowest in the market, as that would result in no competitive landscape in the financial industry. It is at this time, that making use of a mortgage broker professional can help in finding the best terms and interest rates in the market.

Below are just a few reasons to consider when looking to engage in the services of a mortgage broker:

At the very least, if you are looking to negotiate one of the most expensive decisions of your life, it would be wise to speak to a mortgage broker first to get all of your options. Using a broker will give some you some sense of what is out there in the market where banks and lending options are concerned. If you end up deciding to stay with your current bank, that is fine, at the very least, you have done your own research should  give you some solace knowing you have done your due diligence in the matter.

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Furthermore, you may be able to negotiate a lower mortgage rate with your current bank by shopping various options with a broker. However, the rate you acquire is not everything! There are many other factors to consider like amortization, mortgage term, monthly payment intervals, pre-payment options and end in term pre-payment privileges.

Accepting your banks first mortgage offer and decision as the final word on the matter can be rather short sighted, as these intuitions usually look to butter their own bread and see you distinctly as a number where profit may be concerned.

Alternatively, a mortgage broker works in the interest of their clients and does not represent any particular bank. They can survey the mortgage lending landscape and determine what options are best for your unique circumstance.

Mortgage brokers also have access to lenders that are not frequently advertised in main stream media. These smaller finance companies in some cases only deal directly with brokers when it comes to lending and have much more attractive terms.

Why use a mortgage broker in Toronto?

There are a number of good reasons why to use a profession broker. And here some of the top reasons why:

  1. Save yourself some time and in many cases money: Using mortgage professional can save you time as you would not have to apply to multiple lenders all at the same time and very possibly lowering the credit score on your credit report.  The broker can handle all of these details for you and apply to these institutions with one mortgage application and one credit report, alleviating you of the stress of having to shop the entire market on you own.
  2. A decently lower rate: Most financial institutions recognize mortgage brokers as stellar professionals in the industry and afford them and their clients with the best rates with little to no haggling, given the completive nature of this sector. A broker can hence negotiate on your behalf and potentially save you thousands!
  3. More choice and an independent review:  Brokers usually have preferred lenders that they deal with, who in many cases have the best terms in the market, yet many more options that are not available to most off the street.  Ethical brokers will pair you up with a lender that is best suited to your unique circumstances, and not solely because they are paid any referral fee.
  4. Reasonable costs: In many instances for A lender deals, your mortgage broker is compensated directly by the lender. In more complex events, a brokerage fee will apply and be promptly disclosed in writing for your review and acceptance, if you so chose to proceed with funding in your case.
  5. Shielding you credit score:  As described earlier, your broker will be able to apply to dozens of different financial institutions on your behalf with one credit application and not need to pull your credit report for every lender submission. Conversely, if you were to apply to even half a dozen banks and mortgage investment corporations on your own accord, the hit to your credit rating could be seen immediately by the succeeding lender and will demonstrate to them a sort of credit seeking mentality that in some circles is looked at an derogatory, but also reduces your overall credit score. Best to omit this via submitting multiple mortgage applications, and let your broker handle the details.

Thus, based on the above notable points, it does make sense to engage with a competent mortgage broker and explore their services in assisting you with your next mortgage loan.

Professional Services In Toronto

Mortgage Broker
Happy couple signing purchase contract with a mortgage broker

The Process of A Mortgage Broker

In most instances, a mortgage broker acts as the middleman between lenders and borrowers, the process starts off with clients looking to refinance or purchase a new residential or commercial property.

When a potential client approaches a mortgage broker, and the broker vets multiple lenders and finds out the requirements and rates to provide options suited to each particular clients needs.

The broker then requests the client to provide documentation such as a letter of employment, pay stubs and a complete application that alludes to any other important details that may will be required for underwriting purposes and determining the client’s ability to qualify for a mortgage.

The mortgage broker in Toronto is responsible for analyzing the application and the numbers to ensure that the client falls within specific lending guidelines for the the lenders that will be approached on behalf of the client. Its very important in this case then to have a complete picture of the clients credit and income capabilities and to be able to provide mitigating information in the event it is necessary to meet certain mortgage refinancing guidelines.

In the event the client is approved, the funds are lent in their name, and the broker is paid a fee from the lender or borrower, depending on the complexity of the file. The broker only gets paid if the transaction closes.

What Are The Advantages of Using a Broker?

A broker can provide invaluable information on the mortgage market to clients who may not have the best of credit or not savvy with what institutions offer the best home equity loans and second mortgage terms. Many clients are unaware that a mortgage brokerage and take one application and submit the same to multiple lenders on their behalf, without having to pull their credit bureau report for each approval.

The broker can save you time because they possess a great deal of knowledge about lenders, repayment clauses, and administrative charges or other fees that can be hidden in lender contracts. But again, borrowers are still advised to perform their own research when looking for a mortgage loan.

Many brokers have inside knowledge on which lenders are the most favorable for any particular clients needs where debt ratios are concerned. The result is that a borrower will have a much better possibility of acquiring the best terms for a second mortgage or mortgage refinance, as their unique situation will be front and center in the approval process.

Are There Disadvantages ?

Not all brokers are competent! Some mortgage professionals work only part-time and hence have limited knowledge of underwriting criteria and will not be able to provide you with all of the necessary information you would need to get the best rates and terms.

Some brokers work with a limited number of lenders and therefore are unable to offer the best terms to a client, as they are not seeking to think of the box so to speak in the clients best interest.

If you have a very complex case that requires a non-traditional mortgage lender, you will end up having to pay the brokers fees which can we anywhere from 3% and up. In some cases, when borrowing money does not make sense, brokers should be transparent enough to share these findings with their clients, however, many seldom do.

Is There A Difference Between A Loan Officers And A Mortgage Broker?

Loan officers are usually associated with a lending institution like a bank. These banking loan officers can only offer you mortgage products being offered by their respective institution in most cases.

Alternatively, mortgage brokers represent their clients needs and interests and negotiate with multiple lenders on behalf of their clients. They also have greater access to non traditional lenders such as credit unions, mortgage investment corporations and private lenders to name a few.

Mortgage Broker Duties

Mortgage broker in Toronto
Couple meeting with their mortgage broker

A broker’s approach to their work can vary based upon their offerings and services that they provide to their customer base. Below are just a few items they may focus upon where mortgage refinance and second mortgage loans come into play.

  • Taking a role in marketing their services to the public: Although this item seems elementary, there is a significant amount of mortgage professionals in Ontario that are competing for business where mortgages are concerned. A savvy professional will need to find a balance on how to market their offerings in order to get the biggest return for their advertising dollars.
  • Fine tuning their skills in the market place and continuing education: Not every mortgage agent is cut out to do the job of a select few, who go above an beyond for their clients where a home equity loan in concerned. That is why it is important for a mortgage broker to constantly fine tuning their skills in order to offer their clients the best products and borrowing solutions.
  • Establishing strong connections with the best mortgage lenders in Ontario: This should be an ongoing project for the professional who is looking to make a name for themselves in the industry and to be known as one who takes his clients need seriously by having a roster of mortgage lenders that are reliable an non-predatory
  • Setting the correct expectations with the client prior to funding any mortgage loan: It is critical that the agent know his client’s financial picture implicitly to know what would make sense for the them going forward, whether it be a first, second or third mortgage. Sometimes, it is ethical to not take the business if the event the client is not suitable for lending purposes.
  • Reviewing and collecting all relevant financial information from the client: The agent should have a system in place to collect all relevant information and be able to forward the same to the lender in a timely manner to secure a mortgage approval.
  • Entering in all necessary data into the lending system and submitting to the lender: Accuracy is key in this area and it requires attention to detail to make sure the submission reflects the clients position accurately.
  • Providing legal disclosures to the client in a manner that is easy to understand: In most cases, the provincial regulator does provide direction where this is concerned as mortgage brokering is highly regulated in the province of Ontario
  • Forwarding the required documents to the lender as soon as possible to acquire a broker complete file: There should be no lag on the mortgage agents end and all information needs to be sent as soon as received or when possible to the potential bank or lender.
  • Making sure that the services provided offer a benefit to the client: It is very important that clients can see the savings or benefits of the services provided.