As a Mortgage Broker I deal with a lot of people from all walks of life and several generations. I come across the same “myths” with many of them. Sometimes people are going to give you advice, and despite their best intentions it might be misguided. I decided to face some of these myths head on. If you have questions about these, DM me!
Myth #1
Mortgage Brokers are Expensive.
Reality:
In the majority of residential mortgages, you would NOT pay a fee. Mortgage Brokers are paid by the lender and it is separate from your mortgage. It is not “worked into the cost”, and it is not “hidden in the paperwork”.
That being said, certain situations require a private lender mortgage, or an alternative to the main lenders we deal with. In these VERY unique situations, you would have a fee for using a brokers services. However, you are paying for years of experience, and expert advice. If your situation is this unique, you likely need the guidance of an expert and the fee will be worth it, with the right professional.
Myth #2
Mortgage Brokers have limited options.
Reality:
With access to over 15 lenders, I have access to MANY more options than your local credit union or bank. I have lenders who have special programs for doctors, engineers, specialize in 2yr average of income, specialize in self employment options, etc. There are so many options with one application when you use a broker.
Myth #3:
It’s EASIER to get a mortgage at my bank.
Reality:
Gone are the days of a handshake and walk out with a loan. Government regulations require much more stringent qualifying making it harder than ever to qualify for a mortgage, even without considering rising prices, rising rates and inflation. Granted, your bank may have access to your bank account so that you don’t have to provide the down payment verification to them, but the choice, counsel and care that you will receive with a Mortgage Broker in your corner far outweighs the inconvenience of not having to provide a few PDF documents via email. It’s the biggest purchase of your life, a little effort isn’t a bad thing.
Myth #4:
Mortgage Brokers are only for those with “BAD CREDIT”.
Reality:
Although Mortgage Brokers do have access to alternative lenders that will lend to those with “bad credit”, that is not the primary focus of our industry. We provide access to great mortgages and products for all borrowers.
For example as a borrower with great credit, yes you could get approved at your bank but perhaps paying your mortgage off early is a priority for you? Mortgage Brokers provide you with access to more flexible prepayment privileges as well as lower penalty calculations.
Or perhaps your bank considers you to have “bad credit” if your score is 605, (prime lending minimum is 600 but each bank has their own internal policy). I have access to prime lenders who will consider this and at their best rates!…the same rates as someone with a 900 credit score will get.
Myth #5:
Mortgage Brokers aren’t regulated/can’t be trusted.
Reality:
The reality is there are bad apples in every industry. These are the ones you hear about in the news headlines. Bad news spreads much faster than good news….if you have a bad experience at a restaurant you will tell 10 people. If you have a good experience, you’ll tell 5. It’s human nature. I’m not minimizing those who have led people astray, participated or spearheaded ponzi schemes, charged astronomical interest rates and fees, it’s terrible that these people took advantage of Canadian homeowners…but they are not representative of what or who a Mortgage Broker is. They are crooks.
Mortgage Brokers are provincially licensed and regulated. We have guidelines and restrictions on our business practices that we must follow. And we must operate within the law…that’s why you read about the ones that don’t. As a Mortgage Broker, I love helping people. I love to “serve” my clients and make sure that they are going through this journey feeling cared about and heard. Criminals have a different mindset than that. Don’t let one headline deter you from receiving the choice, counsel and care that you deserve.
To summarize: Don't believe everything you hear. There are more options available for Canadian homeowners than ever before and there can be a lot of "noise" around those choices. Talk to an expert and make sure you have choice, counsel, and character when you are choosing where to place your mortgage.
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