Is Hiring a Mortgage Broker a Good Idea?

Are you ready to get a mortgage? If you are and want to work with a mortgage broker here in Calgary, here are the top three questions you should be asking.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

Is Hiring a Mortgage Broker a Good Idea?

For thousands of Canadians the answer is yes. Statistics show that approximately 30% of Canadians looking for a new home loan are shopping through a broker. Many will end up saving thousands in the process, especially when you consider the long-term interest paid on a mortgage. Even saving a fraction of a percent on the interest rate can pay off big down the road. Here are just a few of the advantages you can expect when you hire a mortgage broker to help you get a loan.

Find The Best Deal With the Help of a Mortgage Broker

With so many different types of mortgages available it would literally take you hours to shop for the best rate. As well, a broker often has access to mortgage rates that are considered "wholesale", which can shave off some of the interest rate you’d have to pay at the big banks. 

Mortgage Brokers are More Experienced

Should you get a mortgage with a fixed rate or one with a variable rate? These are the types of questions you can run by a mortgage broker so that you can sort out which one would work the best for you. Since the mortgage broker is acting as an intermediary between the customer and the lender, he has nothing to gain by steering you in the wrong direction. A broker, in fact, is the best professional to turn to when you are confused about the various mortgages and how they will affect both your short-term and long-term finances.

It Won't Cost You Anything to Use a Mortgage Broker

In the majority of cases you won't have to pay anything to a mortgage broker since they will be paid a finder's fee directly by the lending bank. If you are only looking for information at this point, the broker can provide that for free knowing that when you are ready to apply for a mortgage you'll probably come back to him to help find you one.

The worst thing that you can possibly do is assume that the bank you are currently dealing with is automatically going to be offering you the best interest rate for a mortgage. Banks are a business and don't offer special rates to their long-term customers. In this day and age you need to shop around for the best rates and packages for mortgages and the only way to do this effectively is by using a mortgage broker.

The Top Three Questions You Should Be Asking Your Mortgage Broker

Are you ready to get a mortgage? If you are and want to work with a mortgage broker here in Calgary, here are the top three questions you should be asking.

Do You Offer A Lock On The Loan Rate?

If you ever have reason to believe that mortgage rates are going to be moving up in the near future, you'll be able to save quite a substantial amount of money by locking in the rate. You may be charged a small amount for this lock-in, but many times it can be worth it if the interest rates are threatening to increase. Find out how long the lock-in will be effective, how much the charge is and whether a guarantee can be provided in writing for it.

Ask About The Annual Percentage Interest Rate And The Interest Rate

An APR, annual percentage rate, uses quite a complex formula for its calculations. The interest rate and lender fees get divided by the term of the loan. Sometimes it can get so complicated that some lenders make mistakes when they are computing it!

An adjustable loan cannot be computed accurately and the APR also does not take early payoffs into account. If you're using an adjustable interest rate you'll need to find out the maximum adjustment that can be made annually, the highest rate it can be capped at and the frequency of adjustments that can be made on it.

Ask About The Different Loan Types

The first thing you need to do is find a mortgage broker that is able to put things into simple English without leaving you even more confused than when you first walked into his office. There are both disadvantages and advantages to the various types of loans and the best mortgage for you won't necessarily be the best for someone else.

A good mortgage broker will sit down and find out more about your financial situation in order to determine what mortgage would suit your needs the best. Also, he won't only be concerned about your current situation but will look at your economic future forecast as well.

These are the top three questions you should be asking a mortgage broker. If at any time you feel rushed and aren’t getting straight answers from the broker you’re dealing with, it's time to choose another. Getting a mortgage is going to be one of the biggest decisions you'll ever make in your life and you deserve enough time spent with your broker so that you can determine the right course of action with full certainty.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.