Busted! Don’t Believe These Mortgage Broker Myths!
Purchasing a home is one of the most important milestones in our lives and more often than not we need to obtain a mortgage to make our dream a reality. If you’re in the process of purchasing a home, a mortgage broker can help you to find a mortgage product that matches your financial situation and needs.
Unfortunately, misconceptions associated with mortgage brokers and their services cause customers to run from pillar to post to obtain a deal for themselves. By believing in these false facts, clients not only fail to secure the best deal but very often are victims of a mortgage deal falling through despite their best efforts.
As a proficient and accredited mortgage broker, I want to help you steer clear of these misconceptions, and to do so I have debunked three of the most widely believed mortgage broker myths.
Myth 1: You only need your mortgage to be pre-approved to buy your home.
A common misconception while scouting for a suitable mortgage is that once you have your pre-approval in place you are all set to buy your home. Unfortunately, banks have marketed this idea for a long time. The truth is you are not approved for a mortgage until the underwriters have thoroughly reviewed all your supporting documents, your credit, verified income, the down payment availability and source and reviewed the property, and answered all questions which arose during the underwriting process.
Lenders can walk away from a potential mortgage at any time in this process which can leave a buyer with no mortgage available to pay for the property. Working with a qualified and experienced mortgage broker like myself can mitigate the risk of losing your mortgage approval. We pre-underwrite your information in-house, measuring against bank and insurer guidelines. We look for potential problem areas and find solutions before submitting to lenders, so you can be confident with our professional opinion and the corresponding mortgage approvals.
Myth 2: Mortgage Brokers charge fees from the borrower for all types of transactions.
During yesteryears, mortgage brokers did charge fees from the borrower for all types of transactions, but this does not exist anymore in the industry. Times have changed for the better, and now, mortgage brokers don’t charge a fee from borrowers in most mortgage transactions. They are paid a commission by the lender to bring qualified borrowers to the lending table. Moreover, lenders offer professional mortgage brokers a discounted rate and pay them from their profits.
We do all the heavy lifting for the lender such as pre-underwriting to meet guidelines, collecting all supporting documents, and dealing with any issues, among many other responsibilities. We save the banks time and money, so they pay us. In some circumstances such as poor credit or non-provable income, among other scenarios, we need to work with alternative lenders and private lenders. In these situations, we sometimes have to charge a fee, but this fee is known upfront before any agreements are put in place to borrow money. I can’t speak for all mortgage brokers, but we do our best not to charge fees, and when we charge, the fees are kept to a minimum, and again, no surprises.
Myth 3: Mortgage brokers send several applications to many lenders.
A common misconception in the marketing of lending products is that a professional has to shop the lending landscape to get the best lending rates. This is not the modus operandi of professional mortgage brokers because they need to be ethical and responsible to both the borrower and the lender.
If we just sent out applications to many lenders and hoped for the best, we would be out of business quickly. Lenders would not take our submissions very seriously as we would be wasting the lender’s time and resources.
As professionals, we have to decide the best lenders based on each borrower’s qualifications and other specifics. We pride ourselves on knowing all the lenders and insurer policies so we can best serve the borrowers with the best rates and products and at the same time maintain a good reputation with lenders so that we can offer all their products and make sure mortgages fund.
To help you avoid myths like these and solicit my expertise and knowledge to assist you with your mortgage needs, please reach out to Stephen Spriggs.
As a trusted Richmond Hill Mortgage Broker at Mortgage Intelligence, I am accredited and offer a range of mortgage services in Ontario. I assist my clients with their financial needs and help them to meet their financial goals. I am committed to offering my clients the best rates on mortgage products from across Canada. I also provide customized services related to mortgage refinancing, debt consolidation as well as private and commercial mortgages.