If you’re looking for a mortgage broker to get financing for your dream home, you’ve come to the right place. You don't have to rely solely on your local bank anymore. Here are some important things to consider when picking a mortgage broker in Canada.
Make sure your mortgage broker is available
You’ll want a mortgage broker who is available when you need them. The real estate market moves at a breakneck pace. If your mortgage broker isn’t available when you need, you could miss out on buying your dream home.
Ideally, you’ll want a broker who responds to emails, text messages, and phone calls in a timely manner. You want a broker who gets back to you immediately in an urgent situation or within a few hours in less urgent situations. If your broker is taking days to get back to you, it may be time to look for a new mortgage broker.
One of the main benefits of working with a broker is not having to work within a typical nine-to-five workday. However, not all brokers do that. Are you OK if your broker is only available Monday to Friday during regular business hours and isn’t available to speak evenings and weekends? If not, or if you are afraid you'll miss something urgent, you might consider looking for a new broker.
Full-time vs. part-time broker
Being a mortgage broker is a full-time career. So would it surprise you to hear that there are some part-time mortgage brokers out there? That’s right, there are some brokers only doing it part of the time. This can be problematic for a couple reasons.
First of all, your mortgage broker may not be available when you need her or him. For example, if you’d like to make an offer on a property and your broker is at her other job and unavailable, what can you do? It might meab that you make crucial mistakes or miss out on a home altogether.
Sometimes a realtor is also a mortgage broker. Again, this should be a red flag. A mortgage broker is a career you need to dedicate all of your attention to in order to do well. It’s tough to do that if you’re only dedicating part of your time. Mortgage rates change, lenders come out with special promotions and lender policies are always changing. Unless your broker keeps up to date, they could miss out on something crucial.
Number of mortgage lenders
A good mortgage broker will have relationships with dozens of lenders. You want this. The more choices you have, the better. Some lenders are picky about the brokers that they work with. Unless your broker is registered with them to do business, you may miss out.
You’ll want a broker who has relationships with the big banks, as well as credit unions and alternative lenders. This makes sure you are truly able to shop around through your broker.
Find a mortgage broker you like
You want a mortgage broker who is a good personal fit with you. You need to know a bit about yourself and why you are buying the property. Let’s explain.
A good personal fit can be having the same communication style. For example, if you prefer to correspond over email, while your broker prefers to speak on the phone, you might not be a good fit for each other. Likewise, if you prefer to speak on the phone and your broker only makes her or himself available over email, that can be an issue as well.
You also want a broker you can relate to. Do they seem to understand you? Do they understand your situation? If this is your first home purchase, you might be better off working with a broker who is understands the challenges of first-time homebuyers.
Speaking of which, some brokers focus on certain clientele. This is similar to realtors. For example, some brokers prefer to work with first-time homebuyers, while other brokers prefer to work with real estate investors. You’ll want to work with a broker who’s well suited to you. Buying an investment property is a lot different than buying a primary residence. You’ll want a mortgage broker who knows the in’s and out’s of lender policies for rental property mortgages, so you’re well taken care of.
Do people have good things to say about the broker
Before you start searching for mortgage brokers online, it helps to reach out to your personal network and see if they know of any good mortgage brokers. Word-of-mouth referral is one the best ways to find a decent mortgage broker. You can ask family, friends, neighbours, and coworkers whether they know any good mortgage brokers. Although this doesn’t guarantee that you’ll have a great experience, the fact that someone trusted is referring the broker to you, it means there’s a better chance your experience will be pleasant as well.
If you’ve never worked with a mortgage broker before, it helps to read client reviews before deciding to work together. Client reviews will give you a good idea how satisfied or dissatisfied the broker’s clients are. Although it’s possible for fake reviews to be posted, by taking the time to read the reviews, you can get a feel for whether this is a broker you want to work with.
Does your mortgage broker have good references?
Not to be confused with reviews, references are the contact details of people who have worked with the mortgage broker. These can be clients, but they don’t have to be. It could also be lenders, as well as fellow mortgage brokers.
If you’re working with a mortgage broker for the first time, you can ask for references. You can then contact the references and ask what it’s like working with the broker. As long as the references are legitimate, it can give you a good idea how it will be to work with the mortgage broker.
Do they know the area you intend to buy in?
You want a mortgage broker who understands the local real estate market. While it’s your realtor’s job to help find you a home, having a broker who knows the local market can pay huge dividends. If you make an offer on a property, you’ll want a broker who knows if the appraisal is likely to come in at value or whether there could be a shortfall.
Is the mortgage broker licensed?
You want a mortgage broker who is registered to do business in your province. This may seem obvious, but you’d be surprised. You’ll want to ask the broker for proof that they are registered to do business in your province, and take the time to verify it with the regulators.
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About The Author: Arthur Dubois
Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since his arrival in Canada, he’s built his credit score from nothing.
Arthur invests in the stock market but doesn’t pay any fees because he uses National Bank Direct Brokerage online broker and Wealthsimple’s robo-advisor. He pays for his subscriptions online with his KOHO prepaid card, and uses his Tangerine credit card for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.
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