I recall, about 15 years ago, (having never heard of a mortgage broker) working at the branch and sitting at my desk when a client peeked into my office and asked if I could witness his signature for a mortgage refinancing documents. I was taken aback, when I noticed that the mortgage refinance was indeed from our financial institution, however, at a rate Id never seen before! I approached my manager and the regional director for mortgage products in the past, to get the maximum mortgage rate discount for a prior client the week before, and I was still over 75 basis points higher than what the current client had me witness him sign!
Rather perplexed, I asked the gentleman in a curious fashion, “Where the heck did you manage to get such a low mortgage rate?” He gave me a large grin and stated- “I used a mortgage broker to get my mortgage”. I was in shock, as I never heard of a mortgage broker being able to negotiate a mortgage rate that low, let alone have that sort of clout with our bank. The client further went on to describe how the mortgage broker was able to shop around and find him the best mortgage rate with little effort on his part. He seemed very pleased with the terms of the mortgage and referred to the mortgage broker as a new friend. Fast-forwarding 15 years to this day, I can see why getting a new mortgage or refinancing a mortgage through a mortgage broker would make sense for the following reasons:
A mortgage broker works for you
In contrast to most financial institutions lending money, with their large mortgage sales staff, mortgage brokers don’t work for one particular lender. A mortgage broker who is licensed in Ontario, will have a fiduciary responsibility to be working in your best interests.
A mortgage broker represents your interests
If you go into any of the banks in Ontario, you will find wonderful, knowledgeable and helpful staff working in their branches. There are some very knowledge and professional people providing mortgage advice and solutions to mortgage refinancing at these businesses all across the province. The key thing to keep in mind, is that the staff of these large institutions have a certain loyalty to their employer, given, they receive their pay and benefits from this entity. This also does limit the mortgage products they can advise upon based on the product roster being offered by their financial institution. Unlike a bank employee, a mortgage broker does not work for just one financial institution, but has the ability to work with multiple banks, credit unions and smaller financial institutions. A Mortgage broker registered in the province of Ontario, must be licensed with the provincial government body FSCO (Financial Services Commission of Ontario).
One stop shopping for mortgages
When it comes to finding the best rates on mortgages and mortgage refinances, a mortgage broker in Ontario can usually beat most posted rates in the banking world. Furthermore, a mortgage broker can advise on what particular product would be suitable for your mortgage refinancing needs, taking into consideration your personal circumstances. There were instances where some institutions were offering collateral mortgage loans, where the property was registered for 125% of the property value. The benefit for the lender in these cases, was that it allowed for them to extend further monies to the client without having to re-register a new amount on title and refiling the extensive amounts of paper work along with new legal charges for completion of extending further funds. The drawback for certain clients, was the significant discharge fees and/or penalties associated with breaking such a mortgage. And although mortgage rates are very important in a mortgage refinancing project, one can see how the above scenario could negate the benefits of what’s perceived as a low mortgage rate.
Best rates for mortgage refinancing
In addition to being able to the above, a mortgage broker has access to a wide network of mortgage refinancing lenders, who offer very competitive rates. Although in this age, we can easily logon to the internet and find some very low mortgage rates, they don’t always apply to every individual’s circumstance. In many cases, the lowest rates I have seen on the web, apply to high-ratio or insured mortgages, and in many cases, are not what people expect, when they learn the similar rates does not apply to mortgage refinancing, where a client will have a down payment that is in excess of twenty percent.
Scheduling around your time
Many mortgage brokers in Mississauga offer flexible hours to accommodate their client’s busy schedules and work around hours that may be beyond what your bank offers. Also, a mortgage broker can arrange for signing of mortgage documents from the comfort of your home, which proves very convenient for people who are on the go.