If you are trying to buy a home, you may want to consider hiring a mortgage broker. Mortgage brokers deal with mortgage lenders on your behalf – they can compare interest rates and find you a mortgage plan that fits your lifestyle. But if you’re going to trust someone with your financial future, you’ll want to make sure they’re a licensed and verified professional. Here are five things to think about when you hire a mortgage broker.
1. Do you need a mortgage broker?
Of course, the first thing to consider when considering hiring a mortgage broker is whether you need one. Mortgage brokers are great for first-time home buyers or people who are unsure of their financial knowledge. If you are anxious about the process of obtaining a mortgage, or just want a little extra peace of mind, you should definitely look for a broker.
Also, some companies will offer better terms for mortgages handled through a broker, especially if you have had a successful relationship with them in the past. Some mortgage providers will only accept applications through a broker, so it depends on the type of loan and provider you are looking for.
2. How will they be paid?
A mortgage broker like Canadian Mortgage Services may receive payment from either the mortgage lender or the borrower you are working with, but it is illegal for both to pay you. As you search for potential brokers, ask how much you are going to pay in fees for their services and if that expense is out-of-pocket or otherwise arranged.
Most brokers will be paid a percentage of the mortgage they negotiate, so keep that in mind when looking to hire someone. Even if the lender pays them, it is worth knowing what their commission rate is. If they are going to make a lot of money off you, they may be tempted to get a loan regardless of whether it is the best option for you.
3. What are your qualifications?
By law, mortgage brokers must be licensed financial professionals. You can ask your potential broker for proof of their license directly, or you can contact your local licensing authority to verify. On top of that, check the company your broker works for to make sure it is reputable and upholds professional standards.
It’s also worth researching which providers they work with – most brokers will work with a specific range of companies and might even prefer to work with a specific type of mortgage. If you have done your research and know what type of mortgage you are going to want, you may want to find a broker who specializes in that type of loan.
4. Will they be right for me?
Your mortgage broker will help you get through an incredibly stressful process that will affect your entire financial future, so it’s best to make sure you work well together. It is worth interviewing your potential broker to see if their communication style and explaining concepts is right for you.
5. Does your portfolio fit my goals?
Most legitimate brokers will have a portfolio of previous work on their websites. This should give you valuable information about the types of mortgages the broker has worked on in the past, and it could also tell you what types of clients they typically work for. Your portfolio may also contain information about foreclosures that have been filed against you, a factor that you definitely want to avoid.
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