Mortgage Broker – The Difference

The big banks often have strict guidelines for purchase mortgages and refinances. If you don’t meet the requirements, you don’t get a mortgage. It’s that simple. This could leave you hopping from bank to bank until you find one whose criteria you meet.

That sounds like a lot of work and wasted time, right? What if you can’t find a mortgage? Are you out of luck?

Many borrowers need more than what banks offer, especially the self-employed and borrowers or those with seasonal income. If this sounds like you, a mortgage broker is for you.

What is a Mortgage Broker?

Unlike a bank, mortgage brokers don’t write loans. Instead, a broker is a licensed mortgage professional with a network of mortgage providers. A mortgage broker works as the ‘middle man’ between you and the lenders.

All it takes is one application and conversations with one person (your mortgage broker) to get the mortgage you need. The broker assesses the situation and works with the lender that will work in the best interest of the client and their needs.

What Does a Mortgage Broker Do?

So how does the process work?

You start by selecting a mortgage broker. Choose a professional with a proven track record and an excellent reputation. Remember, this person handles one of the most important investments in your life – your mortgage. Whether this is your first home purchase, you need to refinance, or you are ready to buy an investment home, a broker can help.

Here’s how the process works.

• Complete an application. This is the same application you’d complete at every bank. If you look around yourself, you complete the application every time. This gets tedious and time consuming. Brokers require one application, one credit report and then they find you the right loan.
• Provide the necessary documentation – The lender acts as your liaison. He presents your situation to lenders, working with them to see if you qualify. Like you would with a bank, you must provide your income documentation and proof of assets.
• The broker pulls your credit – Your credit score determines if you qualify for a loan. It also determines your interest rate and closing costs. Knowing your credit score helps your broker understand what you qualify for and what banks to contact.
• The broker researches – Brokers know their network of lenders; they know what loans will work given your qualifications. This streamlines the matching process as they don’t waste time trying to get you a mortgage they know you don’t qualify for.
• Underwriting the loan – All conversations and documentation go through your broker. The broker passes along the information you provide to the lender. You always have your trusted professional on your side.

For My Grey Bruce Mortgage and related queries, you can give us a ring at our operational number 226-702-0702.

When Should you Use a Mortgage Broker?

Anyone can use a mortgage broker.

• Borrowers with less than perfect credit. Banks want great credit. Even one mishap may leave you without a loan at your local bank. Mortgage brokers have many lenders in their network, some of which work with less than perfect credit. They know when you need those lenders and which lender offers the best terms.
• Homebuyers looking at a less than perfect home. Banks want homes in great condition. If you are in the market for a ‘fixer-upper’ or a home that has some issues, traditional banks aren’t an option. A mortgage broker, though, likely has options, working with lenders that offer non-traditional loans for less than perfect homes.
• Borrowers that want options. Everyone should compare at least three mortgage offers. Knowing what other lenders offer helps you choose the right loan. What if you could get a lower interest rate or higher loan amount at another lender? You won’t know unless you have options.

The Benefits of Using a Mortgage Broker

Brokers have many advantages over banks, including:

• Access to many loan options – You don’t have to look for the best rate. Complete one application and receive multiple mortgage loan offers. Compare the options and choose the right loan.
• No fees – Brokers receive payment when you close on your loan. The lender pays the broker a commission for the referral. You get free, unbiased mortgage advice and ‘mortgage matching’ without paying for it. You pay the traditional mortgage fees that you’d pay anywhere, but sometimes there is a brokerage fee, but the broker lets you know upfront.
• Negotiations done for you – Your mortgage specialist handles all negotiations with the bank. If you want a lower rate or you have one ‘issue’ that doesn’t meet the lender’s requirements, the broker can work with the lender on your behalf. This takes the stress off your shoulders.
• Expert advice – Mortgage brokers know the ins and outs of mortgage programs at many more lenders than you can apply with yourself. Rather than applying at banks that may not have a loan program for you, let a broker match you with the perfect program.

The Bottom Line

Mortgage brokers don’t finance mortgages. They match you and a lender together, working as the ‘middle man’ throughout the process. When you close the loan, the money comes from the lender. You make your mortgage payments to the lender too.

The mortgage broker is your customer service agent from start to finish. Your mortgage broker can help you throughout the life of your loan too. If you have questions, want to refinance, or are ready to buy another home, you have a relationship with a mortgage professional, which is valuable to have.