What Do Mortgage Brokers Do?
What does a Mortgage Broker do? That’s a very good question!
Essentially, a mortgage broker is the middleman between the borrower (that’s you) and the lender (most often a bank). They negotiate the terms of the loan on your behalf and help find you the best deal or rate for your financial situation. A mortgage broker does most of the legwork when it comes finding the right mortgage product for your financial situation. They also help support you through the paperwork and application process of getting a mortgage in Canada.
Basically – a mortgage broker is your loan sherpa. They know the way, what to look out for, and are happy to help you on the journey atop Mount Home Ownership.
Here’s What a Mortgage Broker Really Does For You
Breaking it down, a mortgage broker does 4 basic but essential things for you:
- Asses your financial situation
- Find you the right loan
- Help manage the mortgage application and paperwork process
- Provide sound advice and experience every step of the way
Assessing Your Financial Situation
One of the first things a mortgage broker will do is go over your financial situation. Your mortgage broker will go through you finances with a fine toothed comb and assess your income, debts, and anything else that could potentially effect your repayment process. This helps the broker determine what loan and lender might be suited for your needs and financial situation.
You as the lender will need to provide some sort of documentation to support your claims of household income, debts, and identity. Some of the more common supporting documents your mortgage broker will need to see include:
- a copy of your latest pay slip
- Tax returns and/or T4 statements
- Letter of Employment
- Personal bank statement
While these are some of the more common documents you might need to provide, each situation is unique and may require more details. Your mortgage broker will work on your personal circumstance and request any appropriate documentation.
When it comes to proving your identity, documents such as a driver’s license, passport, birth certificate, or social insurance number might just do the trick. Check out a full list of supporting documents accepted here.
Once your financial situation has been assessed and determined, the mortgage broker can start working for you. They’ll discuss the various products and loan types available to you. A mortgage broker should should provide you with loan product comparisons and keep you informed of any and all repayment details, up front costs, or on going fees.
Finding You the Right Loan
Once the mortgage broker has a good picture of where you sit financially – it’s time to go to work!
They’ll pump your information into their database, which has 100s of different loan products from different lenders, and start to narrow down which products work best for you and from which lenders.
Mortgage brokers work a little differently then big banks. Instead of being handcuffed by only the loan products their bank offers, mortgage brokers are able to pick from all lenders to help find you the best fitting loan. Loan might come from:
- Major banks
- Smaller banks
- Credit unions
- Other lenders
When shopping around for a mortgage it’s best to take stock of all your options. You’d want to hit all the major banks, and if you’re really ambitious, a few different branches of each of those banks to make sure you find the best deal.
With a mortgage broker all that legwork is already done. The broker has a database of 100s of different loans products which is updated frequently. They may even have access to exclusive loan products that you might have not come across on your own.
What a mortgage broker does is provide you with a package containing all of the best loan products that truly suit your needs. They go over all the fees, interest rates, charges and anything else that might effect your bottom line and help you make a sound decision.
Helping You Manage the Mortgage Application and Paperwork Process
If you feel like you’ve found the right mortgage that best fits into your situation, a mortgage broker will also help walk you through the mortgage application and paperwork process.
Remember, especially if you’re a first time home buyer, a mortgage broker has been around the block a few times. They know all the ins and out, all the little ticks, shortcuts, and time savers when it comes to the mortgage application process. That’s what a mortgage broker does and that’s what they can do for you!
A mortgage broker works with the lender on your behalf. This includes the completing the loan application and all the back and forth with the lender themselves. There’s no need for you, the borrower, to get your hands dirty on this, that’s what the mortgage broker is there for. The broker will work with the lender until your loan is ready to go.
Providing Sound Advice and Experience Every Step of the Way
Most people wouldn’t attempt to climb Mount Everest without the guidance and direction of a sherpa. It’s actually quite dangerous to attempt the climb without one. Even experienced mountain climbers hire these mountain guides on their way up the submit to help with the challenge.
What does a mortgage broke do? Well they’re that sherpa but for home mortgages. They’re the professional the works with people to help them get the best mortgage for their financial situation and the best loan product for their needs. Mortgage brokers have the experience and expertise needed to help guide you to the top of that mortgage so you can take in all it’s beauty.
A mortgage broker’s greatest asset is their knowledge of the mortgage process and their experience with getting people loans for the homes they want to buy. They want to share that experience and expertise with you to help.
If you’d like to find out more about What a mortgage broker actually does and how they can help you find the best fitting loan product for your needs, please feel free to contact us.