At first glance, it may seem that a mortgage broker simply acts as the intermediary between the borrower and lender. The reality, however, is that mortgage brokers do much more than merely serve as a go-between. In this introductory article to the Home Trust Mortgages Blog, we’ll put this narrow view on notice and demonstrate why borrowers should consider the benefits of working with a professional mortgage broker.
New home buyers who in any way fail to meet the restrictive definition of the “typical” borrower imposed by the big banks, often find themselves unable to secure a mortgage. Self-employed individuals, those lacking Canadian credit history, and anyone with previous credit issues most definitely fall outside this preferred profile.
Consider the case of a self-employed business owner; in order to assess the client’s ability to afford a mortgage, it is necessary to conduct a detailed review of the business. The overall business plan must be examined as well as the history of expenses versus revenue. Client details and receivables are also reviewed and from all this information, a determination is made regarding the client’s financial standing.
Of course, this level of client service takes extra time and effort, and unless it is a multi-million dollar deal at stake, the big banks are simply not prepared, nor do they have the processes in place, to accommodate these types of applicants. Mortgage brokers understand the importance of working with clients and providing a degree of personalized service simply not available from a bank representative.
The success that mortgage brokers and the lenders who work with them have had in helping underserved clients may have contributed to the belief that they are only able to help those who don’t qualify for a mortgage with the big banks. This is an unfair characterization of the role of the mortgage broker, and I am pleased to say this outdated way of thinking is on the decline.
Brokers continuously monitor rates and know which lenders are currently offering the best deals. They’ve also established relationships with many lenders and can present your application to a lender with the underwriting expertise to evaluate your application no matter how unique your profile is. Best of all, a mortgage broker can negotiate on your behalf often obtaining multiple offers from which you can choose the mortgage best suited to you.
According to Mortgage Professionals Canada (MPC), the percentage of mortgages arranged though the broker channel has increased from just over one in four in 2004, to more than 40% today. Clearly, Canadians are increasingly opting to hire a mortgage broker as their preferred means of obtaining the best possible mortgage.
At Home Trust, we have a decades-long history of working with mortgage brokers and we are proud to have played a role in helping deserving Canadians purchase a home.
This post is intended for informational purposes only and is not to be considered financial advice.