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Mortgage Brokers in Canada: Their Role To Compare and Get You the BestMortgage Rates
In a nutshell, a mortgage broker acts as the ‘go-between’ a mortgage borrower(you) and the lender (typically the big Canadian banks). Mortgage brokers act onyour behalf offering their expertise and contacts for free, and receive theircommission from the lenders only once a mortgage is arranged. There may becharges for their services if you have an exceptional situation, such as very poorcredit, as they may need to spend more time on your application.Mortgage broker’s are able to get the best rates for homebuyers and their rates aretypically discounted when compared to the big bank’s posted rates because theyarrange so much volume for the lenders (almost $50B last year). As a result, manytimes the banks and other lenders compete amongst themselves to offer the brokerthe best rate in order to secure their business. Many deal with over 65 lenders, andthis is the reason why they can get the best rate for almost any person’s situation.The residential mortgage market is extremely lucrative and competitive, as therewere $191B worth of mortgages approved last year by 80+ lenders. As a result,mortgage brokers are becoming more popular as more people are turning to them tofind the lowest mortgages, representing an estimated 25-30% of mortgages beingarranged according to Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals (CAAMP).Many people aren’t sure where brokers actually source the mortgages from. Arecent report by Canada’s leading mortgage systems supplier, showed that mortgagebrokers secured home loans through the following channels through their network inApril 2008:
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Banks: 50.68%
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Mortgage Banks: 41.92%
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Sub Prime: 4.25%
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Credit Unions: 3.14%The actual mortgage rate arranged by the broker, could be influenced by manyfactors, some of which are:
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What type of mortgage (open or closed) are you looking for?
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Is it a fixed rate mortgage or variable rate mortgage (adjustable ratemortgage ARM)
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Is this a single home mortgage loan?
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Or do second or third loans exist?
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How long do you want the mortgage amortized over?
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Is this is a refinanced mortgage?As is the case with brokers in other industries such as insurance, mortgage brokersare generally former employees of the lenders such as banks. As a result, they knowthe ins and outs of the industry, who to contact and where to find the rates acrossCanada. If you’re looking for help arranging your next mortgage, a mortgage broker,may just be a sound option.
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alysaally

Excellent information presented by you its very nice.

reply10 / 06 / 2008
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