What is a mortgage broker?

Simply put, a mortgage broker acts as a mediator between a mortgage lender and a client looking to purchase a mortgage. A broker's mission is to find a suitable lender that is willing to finance the necessary funds for an individual or a business looking to buy property. All the work a broker does is on behalf of the individuals or businesses inquiring for a mortgage.

Mortgage brokers located in Calgary are required to be a part of the Alberta Mortgage Brokers Association (AMBA). The association was created to make sure that the highest forms of professionalism are enacted within the industry. As a member, Calgary brokers have to obey the business principles and code of conduct curated by the AMBA.

Mortgage Broker vs. Bank

It's becoming more common for first-time Home buyers as well as previous homeowners to reach out to a mortgage broker to arrange their Home loan instead of going to their bank.

This is happening because of the benefits a broker can provide that a traditional bank cannot.

 Benefits of a Mortgage Broker:

  • Access to available and realistic interest rates, products and mortgage lenders

Since brokers work hand-in-hand with lenders, they are able to discover lower rates as well as unique mortgage products in places a big bank would not have access to. Brokers also have the advantage of working closely with local lenders therefore they know which ones are the best.

  • Ability to arrange more complex mortgage options for clients who are self-employed or have a history of poor credit

In the case of complex applicants, brokers have the ability to connect these clients with an unconventional lender such as a monoline or a private lender. Without physical branches, they are utilized through a broker.

  • Can easily help with a mortgage application to ensure pre approval

No matter the circumstance, a broker will guide and assist the client through their application without hesitation or judgement. The pre approval process allows the client to be honest about their information allowing the broker to set them up for success despite potential obstacles that may come their way.

  • Have experience with setting up specialized services

A well-rounded broker has dealt with loans that are commercial, private, construction, reverse, etc. Each mortgage has their own regulations that a broker has past experience with. A client can utilize a broker even if they are not looking at a Home purchase.

On the other hand, a bank also has its benefits including its well-established reputation that firmly stands among other banks as well as upcoming mortgage specialists.

Benefits of a Traditional Bank:

  • It is an existing institution that meets federal guidelines giving their clients a sense of protection that their money is safe and secure

A huge priority for a client when it comes to their money is security. Since a traditional bank has kept their clients assets secure for years, they might not want another pair of eyes on their personal finances.

  • Have access to a range of financial and mortgage products along with extensive knowledge about how those products can save the client money

Since the bank has traditionally been a mediator for past clients, they already have a lot of significant information regarding mortgage products and how they can benefit the client.

  • If clients plan to go with their personal bank, those financial institutions already have easy access to client information, credit histories and balances making the approval process much easier

If the applicant is already associated with the bank, the bank does not have to go digging into their financial history since it's already on file.

Should I use a mortgage broker? 

We may be a bit bias here at HomeHow but we do recommend going online and doing your research to find a local broker that fits your specific needs.

It may be easier to go with a mortgage broker if one of the following relates to your current situation.

  • No proven credit
  • Missed several credit payments
  • High credit card balances
  • Judgements
  • Contacted by bill collectors
  • Declared bankruptcy

Not too worry, you do have options – including us! If you're wanting to place your trust into the hands of a mortgage brokerage that will put you first and foremost when buying property, please apply now.

Want to hear from a mortgage broker expert?

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