Why Use a Mortgage Broker?

These days mortgage brokers are not for people who can not get credit but rather people choose to use mortgage brokers for their ability to shop your mortgage to ensure you have the lowest rate and to provide advice on the features and terms of the mortgage. This is usually the largest financial obligation most of us and it is important to understand the details or fine print of the mortgage. Once your mortgage is approved, a broker will ensure you continue to have the lowest rate all the up until your completion date, meaning if another lender drops their interest rates after you’ve been approved (but before funding) you’ll get that lower rate and this can done multiple times to ensure best rate. 

The terms of the mortgage do differ at different lenders and a good broker will make you aware of these differences. For example HSBC allows up to 20% prepayment but only once a year, just on the mortgage anniversary date while TD allows 15% each year and this payment can be made or contributed to on any payment date. The TD option is much better and will save you money/interest costs. Both of these lenders do register their mortgages as collateral charges rather than standard charges and this can impact you when you go to renew your mortgage as you may have legal fees to move into a standard charge term, a standard charge term can be moved to another lender at renewal if another lender is offering you a better rate at renewal. 

If you were to port your mortgage, how long do you have, HSBC offers 60 days and TD offers 90 days. Another difference is how lenders calculate their Interest Rate Differential (IRD) penalty. With banks, the IRD penalty calculation is approximately 3 times larger than what a monoline lender will charge and the reason is they add their rate discount into this calculation increase the spread or rate difference. 

Stats show that 39% of people do end up prepaying their mortgage before their 5 year term is up and this can be for a number of different reasons ie. selling your home for employment reasons (ie. new job, transfer), family status change (ie. marriage/children/separation), desire to live in another area etc. Brokers always start with the best rate available and then want to look at the terms or the fine print of the mortgage as these terms/conditions can save you money or cost you money.

I work with one of the best brokers in western Canada and I would love to put you in touch, call, text or email me now.

604 551 7959