Your home will likely be the single largest purchase you make and mortgage payments will be a part of your life for the next 25 to 30 years. Decisions you make now could affect you for years to come, which is why it is imperative that you know what to look for in a mortgage broker. The research you do now will lead you to a handful of potential candidates. Once you’ve narrowed the list down, don’t be afraid to ask questions. The more you get to know your mortgage broker beforehand, the better.
Ask your friends and family for recommendations. If they own a home, your friends and family members have been through the very same process. Make sure you ask the opinion of someone you consider a reliable source.
Do your own research over the Internet and by phone. Don’t just trust the recommendations of your family and friends. Ask questions about deals and conditions, and don’t be afraid to compare mortgages rates offered by different providers. Do your homework.
Ask about special conditions when offered a deal. A super low mortgage rate may be attached to a ‘no-frills’ product. This type of mortgage product can typically save you money in the short term, but will cost you substantially more in the long run. Be aware of hidden costs or undesirable conditions attached.
Take notes. The notes you take will come in handy when making your final decision. Take notes that include names, dates, and offer details.
Go with your gut. It’s always good practice to be skeptical and do your homework. If your gut says something isn’t right, it probably isn’t.
Questions to ask your mortgage broker
How long have you been in business? Although there’s nothing wrong with working with someone who’s new to the business, you will probably want to work with someone who has some experience under the belt. Does this broker have an office? Is it buzzing with business, or is it quiet and conservative?
What kind of education or licensing do you have? All mortgage brokers in Canada require a license in order to practice. Some are members of associations, while others work from private practices. You should verify that your mortgage broker is indeed licensed by going to Canadian Association of Accredited Mortgage Professionals website.
On what do you base your recommendations? Remember that your mortgage broker works for the lender. It is their responsibility to deliver good, credit-worthy borrowers, like you, and they get paid handsomely for it. Don’t be afraid to ask them to disclose their fees and commissions up front. You want to be sure that they’re making recommendations for the right reasons and that the number they quote you is reasonable.
What fees and/or costs are associated with the interest rate you’ve quoted me? Sometimes mortgage brokers will quote really low rates just to get you in the door. Once they’ve got you there, they can tack on all kinds of extra fees. Some of these fees include a credit report charge, an appraisal, title insurance, deed-recording and overnight deliveries.
Can I please see the lender’s letter of commitment? If your mortgage broker has promised you a specific rate, ask for a letter from the lender proving that the discussed rate is indeed locked in.
What is your area of specialty? Even though a broker may state that they are “full service,” they quite often facilitate more loans of one type than another. Ask what percentage of their total volume comes from residential loans. If you are interested in commercial property, make sure you ask your broker if they have closed commercial loans before.
Are you affiliated with any mortgage associations? Membership to some mortgage associations can sometimes be indicative of the broker’s oath to offer the best loan options available, regardless of commission. Membership to some associations requires additional education and examinations. Also, those mortgage brokers who do belong to professional organizations may also be listed in a directory. This gives you the opportunity to view any customer complaints, should they exist.
Can you provide me with references? Even though your mortgage broker will most likely come armed with testimonials from past clients, there is no way of determining how old those testimonials are. Instead ask them for the names of Realtors with whom they’ve worked.
How often will we be in contact? Although this might seem like an unimportant question, it could be the difference between a painful experience and a smooth transaction.
The combination of thorough research and proper inquiry should help you narrow down your pool of potential loan providers. Trust your gut and only make your selection if you are fully comfortable with it.
Good luck on your quest for the perfect mortgage rate.
Writer for RateSupermarket.ca