Isn’t my mortgage broker suppost to shop for me? NO! Should I be shopping? Sure.
If you want the absolute lowest rates – shop around, just be aware that your credit will be dropping every time it is hit. Also, low rates aren’t everything – there are other factors to consider ie:
- Prepayment privlidges
- Amortization
- Income proof
- Number of documents required
- If you need an appraisal or not
If you work with a good broker you’ll get good service and competative rates. In my opinion the interest rate is not going to make or break you – simply decide on what broker to use and keep moving forward!
Popularity: 2% [?]
The big question – should I use a whole market mortgage broker?
Answer: YOU CAN’T THEY DON’T EXIST!
I am far – far from a “whole market mortgage broker”. I typically use a maximum of 3-4 lenders.
No broker can ever advertize that they have the lowest rates or have all the products or lenders – the market is too big and changes too fast!
Not only that – but each application is unique and lenders all price transactions differently – by the time you went to all the lenders to see about their rates – the rates will have already changed several times – making your work useless.
The next question is “should a mortgage broker shop my deal at more than one lender?” NO! NO! NO!
The benefits of shopping:
- finding really low rates
Disadvantages of shopping:
- You annoy all of those that quoted you and that you didn’t go with.
- It takes FOREVER!
- Your lenders don’t want to work with you in the future because you’re a “shopper”
The benefits of going to one lender consistently:
- You get to know their products, programs and niches very well – this helps speed things up and save clients money (ie no appraisals in some cases)
- You get a dedicated underwriter who works exclusively with you and you have consistency when dealing with the same lender on all files.
- Your underwriter works fast because they know you are not shopping.
- Your underwriter gives you perks ie. pre-approvals and rate holds, which they don’t give for shoppers.
The disadvantages of not shopping:
- May not have the lowest rates in the market – but if you work with a lender who consistently has competative rates, the pros far outweigh the cons!
Popularity: 5% [?]
Should I pay mortgage broker fees – this post is simply a reiteration of a link to another forum that I commented on.
See what you think:
Original post (http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/02/mortgage-brok-1.html):
A client called us this week upset that his broker charged him a $5000 broker fee. So we asked where the broker got him approved. Much to our amazement, it was at a major “A”-lender. More surprisingly, the client’s credit was excellent.
My response:
Trevor Hickey said…
I am a mortgage associate in Calgary – I disagree with the claim that a broker should not charge for an “a” mortgage when the client has good rates – AS LONG AS THEY ARE CONSISTENT. What I mean by this is the broker should not just charge one person $5k and then charge a different customer $0.00 (if they are both in the same situation). If the broker wants $5k for their services – they can charge it (it’s a free market) BUT you won’t get many clients agreeing to it and therefore the fees charged on an “a” mortgage should be close to none (or nothing).
There are many many other variables than just the type of lender and credit. There is time needed to close, debt servicing, equity remaining etc. One other good thing about a broker who charges lots is that they are willing to work extremely hard to make any deal work because they are being paid so much – also these brokers (since they charge so much) will not have an abundance of clients and can therefore work extremely fast for clients that need it.
Lastly – it is unfair to criticize this broker for charging $5k simply because it was with an “a” lender – with that logic you are penalizing the broker for outstanding work – should he have taken the client to a private lender instead? Perhaps the broker was simply ta magician and got it done at an “a” lender when no one else could.
Feel free to put in your two cents by going here —> http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/02/mortgage-brok-1.html
Popularity: 25% [?]
