Hi, I’m Moe, a Mortgage Agent and Co-Founder of Palm Mortgages. Today’s blog discusses why you should work with a mortgage agent/broker rather than completing the mortgage process on your own. In my experience, this is a question that has come up time and again, with a lot of misconceptions. Here are the top 6 reasons why I would advise you to work with an agent/broker.
Reason 1: Personalized service and advice
A mortgage agent/broker can offer you personalized service and advice when it comes to selecting the best mortgage product for you. Say you’re considering buying a house, so you decide to visit the nearest branch of the bank that you do your daily banking with. That bank likely only has a limited suite of mortgage options available, and it might not necessarily fit your needs or circumstances. Moreover, if you meet with a Financial Advisor at one of the big banks, the truth is, they may not have much time to dedicate to hearing your full story and researching your needs. Having been a Financial Advisor myself at one point in my career, I can say that Financial Advisors are busy, and their work includes not just mortgages, but also selling mutual funds/GICs, credit cards, chequing/savings accounts, lines of credit, insurance products, and so on. In fact, mortgages are only a part of what they do, and their targets and performance are generally measured more so based on the non-mortgage products that they are able to sell.
By contrast, mortgage agents/brokers focus almost exclusively on mortgages. As such, a good mortgage agent/broker will book an initial consultation with you where they’ll take their time getting to know you and your unique circumstances, and learn more about what you’re looking for and your timeline. Based on these factors, they will help you determine the most suitable solutions for your particular needs. All the while, excellent service would be their top priority because they are focused on building long-term relationships with their clients.
Reason 2: Access to dozens of additional lenders
Not all lenders deal with clients directly. In fact, at the time of writing, I have access to 88 banks/mortgage lenders. Of the 88 lenders I work with, only a very small number work with the end client directly. Most are accessed exclusively via a mortgage agent/broker (monoline lenders being one example) and they tend to offer exclusive products that aren’t offered by traditional banks. These range from products for individuals that are rebuilding their bruised credit, to self-employed individuals (like me), those who rely mostly on investment or support income, and everything in between.
Relationships with these lenders are fundamental. For example, having a good relationship with a lender can make them a bit more lenient with their policies which could allow a client to qualify for a program they wouldn’t otherwise qualify for, and/or quicker turnaround/response times. As someone who now works with the lenders I used to work for, I’m often able to leverage my relationships to serve these purposes.
Reason 3: Save time and effort by leaning on your agent/broker’s research and expertise
If you’re looking for a mortgage, a good mortgage agent/broker can do the research for you, and will often know what documents the lenders will require for the specific type of mortgage. Because of the thousands of mortgages I’ve advanced in my time working at the banks, there’s a good chance I already have answers to many of the questions that you may invest a lot of time finding answers for.
I’ve had my fair share of “exhausted” clients who’ve come to me after meeting with multiple advisors from multiple banks who’ve asked for a long list of documents only to be told that they didn’t fit the bank’s criteria (days, if not weeks, later). An agent/broker can save you a significant amount of time by doing this research on your behalf to give you back your time and peace of mind.
Reason 4: Assistance and advice when signing mortgage documents
Mortgage documents are lengthy and include all kinds of clauses and technical terms. Experienced agents/brokers know how to interpret them and can therefore relay that information to you to help you make an informed decision. In fact, I’d take it a step further and caution you to stay away from an agent/broker who tries to skip this part and asks you to just sign what you’re presented. An agent/broker who truly cares about building a relationship with you and fitting you in the right product will outline all terms and conditions of your mortgage in plain, easy-to-understand English to make sure you know exactly what you’re getting into.
Reason 5: It’s more cost-effective than most people think!
A lot of clients I’ve dealt with have mentioned to me that the reason they tried to avoid agents/brokers before reaching out to me is that they believed it would be expensive. The good news? 90% of the time, hiring an agent/broker is completely free to you. This is because agents/brokers are paid by lenders when a mortgage is advanced, at no cost to you.
There are exceptions to this. For example, private mortgage lenders do not pay mortgage agents/brokers for their services so there is often a cost to the clients who obtain these types of mortgages. However, if you’re not looking for a private mortgage and you otherwise have a straightforward mortgage application, chances are you won’t be charged by your agent/broker. If an agent/broker is charging the client fees, those fees must be disclosed to the client, so make sure that the person you’re working with is fully transparent about this point.
A follow-up question I usually get is, “Well, are you picking my mortgage lender based on how much they’re paying you?” My answer is, and always will be, “no.” While I can’t speak to the habits of other agents/brokers, I always place my clients in the most suitable product for them regardless of the paycheque I would get out of it. Mortgage brokering is a relationship-based business largely driven by referrals and repeat business. To me, sacrificing this for an extra few dollars is a non-starter.
Reason 6: Follow-up support for the lifetime of your mortgage
Finally, with a mortgage agent/broker, you will get follow-up support for the lifetime of your mortgage. This means that, even after your mortgage closes, your agent/broker will always be just a phone call or email away if you have any questions or need any additional information down the road. For example, you may wish to refinance your mortgage, or transfer it to another institution altogether. In those situations, you would have direct access to the individual who arranged your mortgage in the first place. This is very important for accountability on the part of the agent/broker, and also provides the client with comfort knowing that, should any questions arise, they would be dealing with someone they already know. Because the relationship between the client and agent/broker ends up being a long-term one, make sure to always do your research find an agent/broker with whom you’re comfortable from the get-go.
As always, if you have any specific questions about anything to do with mortgages, an idea for a topic you’d like us to cover, or need any additional information on something written here, drop us a line at info@palmmortgages.ca.
