Why You Should Use A Mortgage Broker

Posted October 23, 2010 – 5:25 am in: Mortgages
     

A mortgage broker acts as a type of consultant as you research various APR’s currently available through local and national banks and other lenders. It is his job to know the best deals being offered by lenders. It is also his job to know which lenders prefer to deal with what type of applicants.

Toronto has many of these professionals ready to help any house hunter through the loan application and through to closing. A quick Internet search can produce names and contact information for any kind of mortgage assistance you feel you might need.

Not all brokers are interested in doing every type of mortgage. Some brokers like to do things the easy way because it almost guarantees them that you will be approved and they will ultimately get paid for their time. Brokers are all freelancers who work for themselves. They work on commission and neck commission is paid at the time of closing. So in other words, if you don’t close they’ll get paid and a waste a lot of time for nothing.

Choosing a broker doesn’t necessarily cost you any more money than if you had just walked into a local bank at lunch time and applied for the mortgage. When you receive the paperwork from your lender, No matter who that might be, you will always see a commission for a broker or loan officer.

As with any type of broker in any industry, a mortgage broker charges a fee or commission for his services. Because he is a freelancer and works for himself he does not get paid directly by a bank or any other employer. He gets paid by putting together deal for a mortgage that, when approved, will provide him with a check for his troubles.

Some brokers will charge a flat fee of approximately $1500-$3000. Others will charge a percentage of the requested mortgage. It’s always a good idea to know this figure ahead of time because too many people get to the point that they are just waiting for the final paperwork to go to closing and then they are absolutely shocked at what your broker is charging for his fee.

You will most likely be asked to fill out an application. The broker can’t do anything for you until he has had the chance to see the information in the application and assess what the next steps should be. This is actually a valuable service because without using the broker you would need to fill out individual applications at each different bank you are interested in doing business with. And each application would cost $300-$500 that may not be refunded if you are not approved.

Usually there is no additional fee for filling out the application so your broker can look at. The application fee only comes into play when he finally presents it to the lender.

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