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How a mortgage broker saves you money on your mortgage

August 23 2019 by Multi-Prêts Hypothèques
What you'll learn

•    A mortgage broker calculates your borrowing capacity
•    They help you put your application together
•    They negotiate the best rate for you
•    They ensure that the whole process goes smoothly, right up to the transaction
•    Their services are free

Planning on taking out a mortgage in the near future? You usually have two options: you can either enter into an agreement with a financial institution directly or consult a mortgage broker. If you want to save time and money when buying or refinancing a property, consulting a broker is definitely the best option.

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1– A mortgage broker calculates your borrowing capacity

If you don't know what your borrowing capacity is, your mortgage broker will help you figure out what is most realistic for you. The goal here is not to find you the biggest mortgage, but rather to find the one that best meets your needs and budget.

Totally unfamiliar with mortgage jargon? Don't worry—your broker will clarify things for you. For example, they'll explain the pros and cons of fixed and variable rates, sparing you long and tedious internet searches.

2– They help you put your application together

Pay stubs, bank statements, investment statements, offer to purchase, school and property tax bills—mortgage lenders usually require a long list of documents. A mortgage broker will help you assemble all the paperwork and make sure the various forms are complete. You'll feel supported throughout the process, which will help you breathe easier. You'll also avoid the risk of your application being rejected or delayed because you forgot to sign or include a certain document.

In addition, if your situation is particular (e.g., you're self-employed or you've filed for bankruptcy in the past), a broker will help you increase the chances of your application being accepted.
When you're ready to take out a mortgage, you'll want to compare the various mortgage products available on the market. This can be a lengthy process for one person. You have to meet one-on-one with advisors from multiple financial institutions. Plus, some lenders aren't open outside of business hours, so you might have to take time off work to meet with them.

With a mortgage broker, you avoid all that hassle. In a single meeting, you're able to compare the best products offered by a multitude of lenders. You can use the time saved for other important tasks, such as packing.

3– They'll negotiate the best rate and conditions for you

Do you hate negotiating? You're in luck—mortgage brokers are skilled negotiators. Leave it to the experts to handle negotiating with different financial institutions for you. When they present you with the lenders' offers, you can trust that you're getting the best possible interest rate from each of them.

A lower mortgage rate will save you hundreds or even thousands of dollars a year. For example, shaving just one percent off the rate on a $250,000 mortgage will save you up to $11,662.

It's all very well to get the best possible interest rate, but you won't be satisfied if it doesn't come with suitable conditions. Since a mortgage broker is an independent advisor who works for you and not for a particular financial institution, they'll recommend only the products that suit you best.

When negotiating with financial institutions, they'll keep your situation, budget, interests, and short- and long-term projects in mind. For example, if you plan to keep your condo for only a few years, they won't recommend a mortgage with big prepayment penalties.

In addition to helping you get the best possible mortgage rate and terms, your broker will make sure you're aware of all the costs associated with buying a property, such as moving fees, notary fees, and the land transfer tax. Buyers tend to forget about some of these fees, which can significantly impact their budget.

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4– They ensure that the whole process goes smoothly, right up to the transaction

A mortgage broker's work isn't over once you've signed your mortgage. They act as an intermediary in the real estate field who ensures that everything goes smoothly until the bill of sale is signed by the notary. Don't know a notary? Your broker can recommend one.

Once you've moved into your new home or refinanced your property, your broker will continue to help you save time and money. They'll keep you up to date on new mortgage products and rate fluctuations. If you have a variable rate mortgage, they'll contact you when it's time to convert it into a fixed rate one. This will keep you from losing money because your rate has increased too much.

5– Their services are free

Some people are afraid to contact a mortgage broker because they think they'll have to pay for their services. What they don't know is that brokers are paid directly by the financial institutions that their clients decide to deal with. In other words, consulting a broker won't cost you a dime—it can even save you time and money! So, why not call one?

Key takeaways

•    Mortgage brokers save you time because you don't have to meet with multiple lenders one-on-one.
•    Mortgage brokers are skilled negotiators who will help you get the interest rate that's best for you.
•    Mortgage brokers make sure your documents are complete and that you haven't made any mistakes.
•    Mortgage brokers continue to work for you after you've signed your mortgage.