Thinking of becoming a homeowner? Is your mortgage renewal date approaching, or are you planning to refinance your property? Between industry jargon and industry-specific rules, it can be hard to get your bearings. Fortunately, a mortgage broker can clear things up and help you make the right decisions. Let’s talk about how to choose the right one.
Why use a mortgage broker
First, a mortgage broker will pre-qualify you and determine your borrowing capacity. They will then act as an intermediary between you and lenders to find the best rates and mortgage conditions for your goals and financial situation.
Mortgage brokers are also there to guide you through the complex process, provide personalized advice, and help you avoid costly mistakes. Mortgage brokers save you time and money!
What’s the difference between a bank and mortgage broker?
When it comes to financing the purchase of a property, are you hesitating between dealing directly with a financial institution and going through a mortgage broker? Here’s how they differ.
| Criteria | Bank 🏦 | Mortgage broker 🤝 |
|---|---|---|
| Product selection | Limited to its own products | Access to a wide range of products and multiple lenders |
| Interest rates | May offer competitive rates but within the limits of institutional policy | Researches and negotiates the best rates from several lenders |
| Fees | No cost to clients | No cost to clients |
| Flexibility | Harder to qualify for a loan in atypical situations (self-employed, bad credit, no down payment, etc.) and stricter eligibility criteria | Can meet more complex needs with access to specialized lenders |
| Availability | During office hours | Outside office hours |
| Approval process | May take longer if you consult several institutions | Quick, easy and time-saving because they prepare and present your file to lenders |
| Impartiality | Wants to sell its own products | Offers independent, personalized advice |
That said, obtaining financing from a financial institution can be worthwhile, especially if you group several financial products together to obtain more attractive terms and rates. Plus, the bank already has your financial information on file, so doing business with them can be quick and easy.
On the other hand, if you’re looking for negotiated rates from multiple lenders or personalized support, a qualified mortgage broker is the best solution.
Criteria for choosing a mortgage broker
Not all professionals are created equal. Consider the following criteria to help you make an informed decision and enjoy reliable mortgage support.
Training and accreditation
In Quebec, mortgage brokers are regulated by the Autorité des marchés financiers (AMF) and subject to rules designed to protect clients. Consult the AMF register to ensure that your broker has a valid licence to practise.
Specialized expertise
Some mortgage brokers choose to specialize in a particular clientele, such as first-time buyers, self-employed borrowers, or real estate investors. Others develop expertise in refinancing, commercial loans, or farmland, for example.
A broker with several years of experience and expertise will have a better understanding of the market, lender requirements, and the ins and outs of certain financial products.
Reputation, transparency, and client reviews
Don’t hesitate to read online reviews and look for client feedback, be it on Google, Yelp, forums, or social media. If a mortgage broker has a website or blog, review their posts and services to make sure they’re relevant to your situation and inspire confidence.
Word-of-mouth and recommendations from friends are also great ways to get referrals and find the right broker for you.
Our tips for finding a qualified mortgage broker
Similar to a job interview, choosing a broker requires a structured approach. Indeed, having a good mortgage broker on your side offers many advantages, so don’t make this decision lightly. Here are our tips for finding the best broker for your project.
Ask the right questions
Here are a few of the questions you’ll want to ask a mortgage broker to ensure that you’re on the same wavelength and that they can meet your expectations.
- How long have you been a mortgage broker?
- What institutions are in your lender network?
- How are you paid?
- What are your fees and charges?
- How do you communicate with clients during the process, and what is your availability?
- How will you find the best mortgage for my needs?
- What documents do you need for an application?
- What types of mortgage solutions do you offer?
Before meeting with a broker, you can determine in advance how much you are able to borrow. Use our online borrowing capacity calculator to get a clearer picture of your financial situation.
Meet with different brokers
Before making a decision, it may be wise to talk to more than one mortgage broker. Not only will you be able to compare their availability, expertise, and the quality of their advice, but you will also be able to assess which one you have the most affinity with and which one you feel most comfortable and confident with for your project.
Mistakes to avoid when choosing a mortgage broker
Choosing a mortgage broker is an important step and should not be taken lightly. This professional can greatly simplify the process and help you obtain favorable terms, provided you choose the right one. However, some borrowers make mistakes that can limit the quality of their experience and the options available to them.
One of the most common mistakes is not asking enough questions. A good broker will take the time to clearly explain the different options, the terms of the loan, and the impact of each decision. Also, don’t underestimate the importance of trust. If you don’t feel listened to or understood, it’s best to continue your search.
A good broker is not just an intermediary: they are a true ally who will support you with rigor, transparency, and understanding throughout the process. By focusing on trust and clarity, you will put all the odds in your favor to make your real estate project a reality with complete peace of mind.
Who pays a mortgage broker?
In Quebec, mortgage brokers receive a commission from lenders.
In rare cases, such as when the only option is to borrow from an alternative lender, you may have to pay the mortgage broker a fee. If this is the case, the broker is legally obligated to inform you of this before proceeding.
Can I change brokers partway through the process?
Would you like to work with a second broker? It’s possible, but this strategy could be detrimental to you. It may slow down the process, not to mention that multiple applications could affect your credit rating.
Key takeaways
- A mortgage broker acts as an intermediary to find the most advantageous rates and best mortgage terms for your needs.
- Mortgage brokers in Quebec are regulated by the Autorité des marchés financiers (AMF).
- Mortgage brokers receive a commission from the lender.