Mortgage Shopping: What Does a Mortgage Broker Do?

In what has been an unprecedented year in buying and selling, Ottawa Real Estate is remaining hot, and mortgage rates cool. While buying a home and getting a mortgage is a big financial decision, the process of securing a loan leaves even the most experienced buyers with a laundry list of questions. Naturally, you will want a team of trusted professionals on your side to walk you through the options that best suit your unique situation. Allowing yourself some time to properly shop around and do your homework on what mortgage products and features are being offered is essential. 

Fortunately, this is where the expertise of a mortgage broker comes to your aid. Instead of spending countless hours researching and setting up multiple appointments, an experienced broker can access their tools to find you great mortgages to compare and choose from, streamlining the process to find what suits you and the needs of your family. 

Bank or Broker: What’s Best For You

In the past, inquiries about mortgages were primarily done at the bank. While this remains an option today, big banks can often feel intimidating and may leave you with fewer options when it comes to refinancing your mortgage, getting a new one, or accessing the equity in your home. As a result, many buyers are turning to mortgage brokers for help instead.

Lenders have become increasingly competitive in recent years, creating a surge in demand for mortgage brokers. A broker will be able to provide unbiased options with the goal of finding a lender that offers rates and conditions suitable for you. 

As opposed to traveling from bank to bank and undergoing hard credit checks, creating an unwanted dent in your credit score, brokers will only run your check once or twice when shopping for your different mortgage products, having a less detrimental impact. Additionally, the mortgage broker is paid by the lenders themselves and not the clients, which makes this a great option for buyers to find the best rates and products available at any time.

Ask The Right Questions

To make the most of comparison shopping, you need to know what options are most important to you. Come prepared and make sure to know what you can afford and how much of a down payment you have. You should also have a list of questions to ask the broker.

• What type of mortgage is best for my needs?
  • a fixed, variable, or adjustable-rate mortgage
  • an open, closed, or convertible mortgage
• What mortgage features and options are best for my needs? 
  • a short or long mortgage term/ amortization period
  • frequency of mortgage payments
  • regular or accelerated payments
  • the ability to make prepayments or lump sum payments 
  • the option to transfer my mortgage to another home if I sell my home
• What are my options if I cannot make a payment?
• What penalty charges may apply if I want to break my mortgage
  contract or renegotiate a new one?
• Will I have to pay an additional fee if a payment is late?
• How can I change the size of my mortgage payments?
• What fees are involved in setting up, discharging, or renewing my mortgage?
• How can I save on interest charges?

With so many different brokers available today, be sure to check that your potential broker is licensed with Ontario’s Financial Services Commission, or ask your family, friends, and your Royal LePage Team Realty agent for their referrals. At the end of the day, no two mortgages are the same. Make sure you have considered all options, including potential cashback, payments, and penalties, and choose the one that feels most right for you in your journey forward in Ottawa Real Estate.