Okay so you are looking to buy a place but do not know whether to go with a mortgage broker or with the big bankers, and you want to get the best rate and the best deal possible (of course, what person would not?)
Let me explain the difference first off.
A mortgage broker is a professional who is a freelancing agent. They go between the lenders and the borrowers. They do not work for anyone, they work for themselves, and have contacts to lots of lenders. Think of them as a recruiter- they seek out people interested in borrowing for a home and fix them up with a lender that will work for them. They can even go between you and the big banks for a mortgage. They do work by getting to know you, calculating what you could be approved of, sending your application, and discussing with you what would work for you in terms of fixed or variable mortgage. Many people say they liked their mortgage broker because they can often get a better rate than if they went to the big banks themselves. Some people also say that the mortgage broker helped them get approved even though their credit history was not so hot.
A loan officer at the big bank is KIND of like a mortgage broker except they just work for one bank. A loan officer can sit down with you and talk to you just like a mortgage broker to see what your best fit is in terms of getting a mortgage. They can negotiate with you for you to get the best deal on a mortgage (e.g. the best fixed rate they have is often not the posted rate, if you get the posted rate, then you pay more money). They get paid by the bank, either through commissions, or salary + commission, or just salary. So who to choose?
I can meet you on your time.
You will get a very competitive rate.
I can get you approved for more.
If your credit score is not good, I can find a lender who will take you on.
You do not have to negotiate, I will do the negotiating for you.
I only get paid if I get you a mortgage that you are happy with.
I only pull one credit and can submit to as many lenders needed to fund your deal.
I must maintain a high level of professionalism and keep up with all offerings and developments within the industry.
In order to meet your needs, I have a wide array of products from which to choose, mortgage banks, private sources, independent lenders, mono-line lenders.
The big con is that you have to be able to negotiate or else you will not get a good deal.
You have to do the shopping around (go to different banks etc.) which can be time
Their rates often are not as good as mortgage broker rates.
If your credit score is not up to snuff, they might not take you on.
You might need to get supervisor approval for requests.
Bankers get paid whether they get you a mortgage or not.
If you visit several banks then you will get your credit pulled many times which will affect your credit score.
For most people choosing a mortgage plan and buying a home is one of the most important financial decisions that they will make in their lifetime.
A few things to consider before starting the mortgage process:
Review your credit score.
I will review your credit score and it will play a role in qualifying you your mortgage loan.
Calculate how much you can actually afford before shopping for a new home.
Save down payment required to secure your mortgage loan.
Set aside additional spending for closing fees, insurance, property taxes, home inspection
and other costs associated with purchasing a new home
Step One: The Mortgage Application
Get in touch with me or schedule an appointment to understand the requirements to see which type of mortgage is best suited for you.
More often than not, I will ask to see the following documents:
Current mortgage information (if applicable).
Assets and liabilities.
Credit report (and/or authorization for one) and basic information such as name, address, SIN number and birthdate.
Employment Verification: A current Letter of Employment and pay stub. You may also be asked to provide 2 year of T4s or Notice of Assessments for further history. If you own a business, be prepared to provide the last 3 years of Revenue Canada Notice of Assessments and possibly financial statements.
Sale Agreement for your current home and mortgage statement (if applicable).
Purchase agreement (if applicable).
MLS listing (if applicable).
Confirmation of your down payment.
I will assist you in determining the very best mortgage solution to fit your financial needs and goals.
Once I have a good understanding of your financial status, goals and plans for the future I will evaluate your overall strategy for purchasing a home.
Often times, your mortgage solution can depend on some of the following questions:
Do you plan on living in your new home for many years? Or is this a short-term living arrangement?
Are you planning to make improvements or renovations to the home?
Are you purchasing this home as a second residence? Or as a rental property?
Congratulations! After you have been approved for a mortgage you will go through the mortgage approval form me. I will be able to walk you through the forms and answer any of your questions. At this point you will also get in contact with your lawyer or solicitor. With the help of me, your Mortgage Agent, your lender will forward the mortgage instructions to your lawyer/solicitor. The final stage is to meet with your lawyer to sign all of the legal documents.