While the Canadian housing market is showing signs of slowing, they are slight and house sales remain robust. There’s a 15% increase in sales from just a year ago at this time with the average home price selling for $679,051, a whopping 26% higher than a year ago.
Buying a house during normal times means you have to be organized. But buying a house in a robust housing market means you have to be prepared when you find the house you want. And that, of course, includes how you’ll pay for it.
It’s time to ask a mortgage broker all those questions you need to be answered about financing a home purchase.
Read on to get your mortgage broker questions answered so you’re ready to make that home dream a reality.
What Is a Mortgage Broker?
A Milton mortgage broker is a person who helps you to find the right mortgage for your unique needs. Consider them as a personal shopper for mortgages or an expert in mortgage options.
They work with a variety of lenders whose products they know, so when you need a mortgage they can find one that is the right fit for you.
Now, you technically might be able to go looking for different mortgages yourself. But this is a time-consuming and overwhelming task. The job of the mortgage broker is to do the legwork for you and compare lenders and mortgage terms that get you a mortgage that works for you.
How Does Working With a Mortgage Broker Work?
Once you’ve prepared for the homebuying process, you’ll need to find a mortgage broker. The mortgage broker can begin the process of qualifying you for a mortgage.
The mortgage broker works with you and the other people involved in home buying, like your realtor, through the process.
The broker can help you to see how much money you can qualify for so you have a budget when you start to look for a house. Once you find a house, they can find the lender who offers the best terms for your loan. Then they act as the middleman between you and the actual lender.
Mortgage Broker vs. Lender, How Are They Different?
You might hear the term mortgage broker and mortgage lender and wonder if they’re the same. They are not.
A mortgage broker doesn’t actually lend the money to the borrower. A mortgage lender does lend the money. The mortgage broker works with a variety of lenders who offer lending services.
The broker acts as a middleman bringing the lender and the borrower together.
A lender only represents one financial institution, the bank or credit union they work for. The advantage to working with a broker then is that they have access to a wide range of lenders so they can find you the best loan for your needs.
How Does a Mortgage Broker Get Paid?
You might be worried that if you hire a mortgage broker that it will cost you more. In fact, in most cases, the mortgage broker is paid by the lender after you close on your loan.
What the mortgage broker makes is usually a percentage based on the amount of the loan. They can’t, however, be paid based on the interest rate as laws prevent that.
If there’s a cost for the borrower from the mortgage broker, it will show up at closing in the closing costs. There are also laws prohibiting a mortgage broker from being paid by both a borrower and a lender at the same time. It’s smart to ask how the mortgage broker gets compensated right away when seeking one out.
What Are the Benefits of Working With a Mortgage Broker Over a Lender?
There’s a reason so many homebuyers decide to work with a mortgage broker over going to a direct lender.
First and foremost, a mortgage broker can help you find the best mortgage deal. Because they have access to many lenders, they have the ability to compare and shop for you to get that ideal Milton mortgage.
A broker can also save you, as the homeowner, a huge amount of time. It takes a lot of time and research to seek out different lenders on your own. The mortgage broker can negotiate broker fees and mortgage rates on your behalf. They can also help to keep the mortgage process on track.
Anyone who has ever bought a house will tell you there can be plenty of surprises that come with the buying process. Using a mortgage broker means you have an expert in your corner. They know the industry and the potential pitfalls that might arise and can help to guide you through the process.
Another big advantage to a mortgage broker is if you have tricky or challenging needs. Maybe you don’t have a spotless credit history and need to find a lender who will work with you. A mortgage broker has the experience in the field to help find the lender for your needs.
Other Questions to Ask Your Mortgage Broker
Once you understand more about how a mortgage broker works, you’ll want to shop around for one that will work for you. Here are some other questions to ask:
- How will you get paid?
- Will we pay you or will you be paid by the lender?
- What lenders do you work with?
- What experience do you bring to the table?
- Can you provide references?
Then you want to ask specifics about what they think a mortgage will look like for you.
Questions to Ask a Mortgage Broker as You Prepare to Buy a House
Once you ask a mortgage broker all your questions and find one who seems like a good fit, you’re ready to buy a house. Using a mortgage broker through the process can help have an expert in your corner during the biggest purchase of your life.
If you’re ready to start the process or you’d like to talk with one of our Milton mortgage experts, contact us today for more information on our mortgage services.