August 21, 2019

The Importance of Choosing a Broker in the Current Canadian Mortgage

Due to low mortgage rates in Canada, banks and brokers are both offering lucrative mortgage deals. With speculations of mortgage rates rising in the future, for Canadians this may be the best time to secure an appropriate deal according to calgaryherald.com.

The perfect timing to present this analysis as many borrowers are struggling to find the best deal before the Canadian mortgage rates climb. While banks will be the first to toughen their policies and increase their rates, this may be the best time for borrowers to secure their chance of finding the right rate by choosing a broker.

The Toronto Real Estate Board thinks that with a stricter mortgage policy in effect, there are some clear advantages of choosing a broker. Brokers offer more choices and open doors to better options and flexible terms. The possible reason behind this is their professional relationship with a wide number of lenders. Without the mortgage banker, a borrower is confined to the best deal offered by the particular bank.

On the other hand, a mortgage broker has access to multiple lenders and banks and therefore, is able to find more competitive mortgage rates and deals. Due to their professional relations, banks and lenders are more likely to offer brokers better rates than they’d offer the individual buyer. Yet, since the brokers are not working for any bank or financial institution specifically, they can offer impartial and unbiased advice to their clients.

Another reason why mortgage brokers will be able to find better deals is that they are more aware and well-informed about the Canadian mortgage market. When dealing directly with banks, borrowers usually have to carry out all the research, and more importantly, negotiations on their own.

But due to lack of industry and market knowledge, prospective buyers may be unable to negotiate for the best rates. So, bankers may find them an easy target to lure into deals that are more profitable for banks instead of the borrowers.

However, not all the banks are deceiving in this aspect. As a matter of fact, some banks do offer special rates and deals for their older customers, but a long standing history and flawless credit score plays a crucial role in this aspect.

In contrast to this, mortgage brokers may find an appropriate deal even for borrowers with low credit score issues. Mortgage brokers take out the time to analyze your credit score in a better way. A low credit score does not always mean that a borrower cannot qualify for a better mortgage rate. In that case, brokers will dig out the best deal for you even when banks won’t.

Another major negative view related to mortgage brokers is that the industry is not regulated and therefore, the risk is higher. But as far as Canada mortgages are concerned, this assumption is false. According to the Canada Mortgage and Housing Society, all reputable mortgage brokers are regulated by federal and provincial financial services regulation agencies.

Like banks and other major institutions, brokers are also required to strictly adhere to the rules and compliance standards. In the case of mortgage brokers, the Financial Services Commission of Ontario FSCO regulates all mortgage professionals and protects borrowers against related fraud and crimes. This can be verified at fsco.gov.on.ca/.

Borrowers should be cautioned against brokers involved in questionable business practices and the ones who are offering rates that are too good to be true.
It is important to choose a well-reputed broker.

Rates are going to rise sooner than expected and this may be your last chance to find the best rates. Yet, the best mortgage deal is not just about the best mortgage rates. It is about finding rates that will benefit you in the long run. Only an experienced, knowledgeable and honest professional can help you find that deal before it is too late. So, choose wisely.

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