What is a mortgage broker?
Just like any broker, a mortgage broker assists in brokering a deal between you and a third party. In the case of a mortgage broker, they will broker a deal between you and a lender, typically a bank but could also include credit unions and other types of financial institutions.
Mortgage brokers get paid a commission from the lender so most will not charge the end client for their services.
A good mortgage broker will be knowledgable on the current home loan market and based on your needs, be able to find the best product to suit you.
Why should I use a mortgage broker?
This is a great question and one that is deserving of a blog post dedicated to it. We’ll post the link here once it’s done. In the meantime, simply put, a mortgage broker should find you the best deal on the market to suit your needs. Now that could be the best deal in terms of interest rates, or it could be the product with the best features to suit you. It’s about the mortgage broker meeting your needs.
If you have a long-term relationship with your bank however, and wish to continue that relationship and you’re happy with their products, then a mortgage broker may not be for you.
How much does a mortgage broker cost?
A mortgage broker will receive a commission from the lender that they write your loan up with, thus most mortgage brokers will not charge you anything.
It is worthwhile asking the mortgage broker up front what their fee schedule is incase the particular broker you are considering does in fact charge their clients.
Do mortgage brokers do commercial loans?
Again, it’s up to the individual mortgage broker and their company policy. However, you will find that most mortgage brokers will deal with commercial loans as they are big ticket items and can be worth a lot of money in commission to the broker.
Do mortgage broker do car or personal loans?
Normally, most mortgage brokers will not deal with car or personal loans as they are small ticket items and not worth their time. As the title suggests, a mortgage broker deals with mortgages (home loans, investment loans, commercial loans, etc.).
What sort of documentation would I need to show a mortgage broker?
This is largely dependant on the reason you have for seeing a mortgage broker. For a standard home loan, you’ll want to bring a long proof of income, bank statements showing your deposit, and any other supporting documentation of assets held.
For other types of loans, please consult with your mortgage broker – they will advise you what they need to have. Most mortgage brokers will be happy to meet with you first without any paperwork to discuss your needs and goals and then they’ll advise you what paperwork they require from you.
How do I find a suitable mortgage broker?
Generally, look for someone who has been in the finance industry for at least several years. Preferably you’d want to deal with someone who has had some experience working for a bank too as they would have good knowledge on banking procedures.
We have recommended some firms in our blog posts but it depends on the area you are from. Most of our recommended firms are happy to work over distances so it could be worthwhile checking with them.
Image Credit: By RRZEicons (Own work) [CC BY-SA 3.0], via Wikimedia Commons
