Regardless of where you are on the homebuying path today, the biggest challenge when it comes to buying more real estate, for most of us, is financing. That’s why it always pays to have thoughtful, unbiased advice about the wealth of options available to you.
Rules, Rules, Rules
Over the last twelve years or so, the Canadian mortgage market has become increasingly complex, if not downright confusing. Since the financial crisis of 2007-2008, governments at all levels – federal, provincial, and municipal – have successively implemented at least forty new rules and regulations.
Things like:
- Shortened amortizations (‘08, ’11, ’12)
- Higher credit score requirements (’08, ’12, ’20)
- Higher down payment requirements (’08, ’10, ’15)
- Tougher qualification standards (’10, ’16, ’18)
These rules generally aim to ensure the stability of our housing markets and financial system, and to protect homeowners from taking on too much debt, both of which are good. But at the same time these constant rule changes make things harder and more confusing for most would-be homeowners.
That’s one of the biggest reasons why you need a great mortgage broker. Not just an “OK” one. Not one whose heyday was fifteen or twenty years ago and today is just coasting by. And definitely not one who only does a few mortgages here and there as a side gig. No, today you need a true expert who lives and breathes mortgages – someone who knows the ins and outs of the mortgage market to help you find the deal that’s most suited to your unique financial situation and, more importantly, your overall financial goals.
What Is A Broker Anyway?
Of course, if you haven’t worked with a broker before, you’re likely wondering what a mortgage broker actually does.
A mortgage broker is a licensed mortgage professional who works with many different lenders on your behalf to get you a home loan. Brokers have access to a variety of different lenders – from big banks to credit unions to trust companies and even private lenders – which allows them to tailor a mortgage solution that’s just right for you.
Sometimes “just right” is just the lowest possible rate, which brokers are great at getting. Indeed, it’s how most brokers try to differentiate themselves, and it works because yes, we almost always get a better rate than you get going to the bank on your own. But often your needs are more complex, especially if you’re an investor, and that’s when a great broker really proves their worth.
Brokers vs Banks
Unlike a broker, your current bank only offers you their own products. This not only limits your options, but it also limits how your bank’s mortgage rep thinks about your file. If your goals are to build an investment property portfolio, pay off your mortgage faster while generating massive tax deductions, or just preserve flexibility in case of major life changes, there’s a good chance your bank rep doesn’t have a whole lot to offer. They’ll simply offer you the same thing they offer everyone else, because that’s all they know.
Furthermore, when dealing with a big bank you’re just a number. Just think about the amount of time your bank takes to call you back if you submit a request. Go ahead, I’ll wait… Now compare that level of service to an established, professional mortgage broker. A broker is a small business owner whose built up their client base and reputation over many years largely by providing top notch service. Trust me, when you’re buying a house or applying for a mortgage, you don’t want to wonder what’s happening. You want daily updates. You want a real person who answers their phone.
Finally, since a broker deals with so many different types of clients daily, you can be sure that they’ve seen every loan scenario there is – the good, the bad, and the ugly. This broad-based experience positions us to help you achieve your goals, no matter where you’re starting out from.
Don’t get me wrong. None of this is to suggest the banks don’t have great products – quite the contrary. I put many of my clients with the big banks and even have a few mortgages of my own with them. The point is simply that you probably shouldn’t leave it up to ABC Bank to tell you whether the ABC Bank Mortgage is the best option for you.