How Do Mortgage Brokers Work?

Posted on 14 March, 2019

There are many misconceptions about Mortgage Brokers and our industry as a whole, and we believe that a lot of this stems from a lack of understanding about how Brokers actually work. From what the process is, to the costs involved and how we choose the best lenders for our clients, we thought we would take some time to summarize some of the most common topics of interest for our potential clients.

 
The Process

Your Mortgage Broker will likely want to begin with an initial consultation to assess your current financial situation and discuss what type of mortgage product you are looking for. From there, we handle all of the details from submitting your mortgage application and required documentation, to liaising with your Realtor, Appraiser, and Lawyer to ensure the process goes smoothly. It is also our job to keep you updated and educated throughout the process.   

 
The Cost

One of the most frequently asked questions in our industry is “what fee do Mortgage Brokers charge?” The answer is that if you are looking for a traditional mortgage (not commercial or private), we charge our clients nothing for our services. From the initial consultation to the closing of your mortgage, there are no fees associated with using a Mortgage Broker. How does this make sense? We are actually paid a commission or ‘finder’s fee’ by the lender for helping our clients secure a mortgage through them. 

 
Are Mortgage Brokers Biased?

A common misconception about Brokers is that we only refer clients to our preferred lenders. While we do form strong relationships with many of our lenders, it is absolutely not in our best interest to always send business their way. Why? Because at the end of the day, word of mouth and referrals from happy clients are worth more than a higher commission on a single mortgage transaction, and that means finding you the best product that is tailored to your unique situation.

We are here to represent you, negotiate your mortgage on your behalf and be your point of contact for any of your mortgage related needs - even after your mortgage has been fully approved.

 
Are Mortgage Brokers and the Mortgage Specialist at my Bank the Same?

The short answer here is no. There are two key differences between an independent Mortgage Broker and the Specialist at your bank:

  1. It is mandatory for your Mortgage Broker to be certified through the Real Estate Council of Alberta. This requires initial training and testing to become licensed and Brokers are also required to renew their license each year.
  2. Mortgage Specialists at your bank are usually paid by way of salary or an hourly wage, while Mortgage Brokers work solely on commission. Simply put, if they don’t get you a mortgage, they do not get paid. 

If you would like to learn more about the process, please feel free to contact our office. Whether you are looking to obtain a mortgage right away or down the road, we want to ensure you enter the process with confidence.


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