If you are in the process of purchasing a home, refinancing, or thinking of taking out a home equity loan, you will want to find the right lender who can help you with your needs. Given the vast array of borrowing options, the search can be frustrating, time-consuming, and overwhelming.
If you are considering enlisting the services of a mortgage broker, you will be benefiting from their expertise and networking abilities to get you the best rates and terms. Unfortunately, the services offered by mortgage brokers can be filled with misconceptions leading to mistrust.
The truth is that mortgage brokers are here to help you, so we’ve debunked the top 5 widely held myths associated with mortgage brokers to help you make the right choice.
1. Mortgage Brokers Charge Exorbitant Fees
It’s a common misconception that mortgage brokers have hidden costs and fees associated with helping you secure your loan, but that’s not the case. With many straightforward applications, mortgage brokers are paid a referral fee in the form of a commission by the lender and they do not charge additional fees. For more complex applications, mortgage brokers might charge a fee based on the value they have added or based on the money they have saved for the client. If there is a small fee involved, mortgage brokers are to be upfront about communicating the expectations so there are no surprises.
2. A Mortgage Broker Isn’t Necessary
For many homeowners trying to obtain a loan, their first stop is the bank. The general sentiment is that they have a better reputation and can secure the best mortgage rate and terms. The problem is that banks can only offer their own products, while mortgage brokers have a vast network of lenders to choose from allowing them to find you the best mortgage rates and solutions for your unique needs.
Additionally, mortgage brokers can assist individuals who have been denied a loan by the bank who are self-employed or have poor credit, thus offering a much-needed service for anyone trying to secure a loan. In short, mortgage brokers offer an essential service that fills the void for anyone denied a loan by the bank and should be considered a top-of-mind choice.
3. Mortgage Brokers Only Focus on Low-Interest Rates
It is common for many searching for a home loan to get caught up in obtaining the lowest interest rate. While a low-interest rate is important, a mortgage broker is trained to focus on more than just the interest rate. They have first-hand knowledge of how likely it is that you will get approved, so they might not go with the loan with the lowest interest rate, but the one that you will get approved for.
Mortgage brokers are specifically trained at handling difficult and complex applications and as a result, they have experience at knowing how best to get you approved without focusing solely on rates.
4. If You Have Poor Credit, You Won’t Get A Mortgage Loan
This is simply not true! Mortgage brokers are designed to get people approved for a loan when the bank says no. They are dedicated to getting the best mortgage deal regardless of income or credit history. If you have been denied a loan by the bank or are unable to find a lender who can provide you with a mortgage loan, you may want to consider the services of a subprime mortgage broker.
When to consider a subprime mortgage lender? You should reach out to a subprime mortgage lender if:
- You can afford the cost of homeownership but have been denied by the bank
- If you have poor credit
- If you are self-employed, freelance, or earn commission-only income
- If you have been faced with a consumer proposal or bankruptcy.
5. Mortgage Brokers Are Influenced By Big Lenders
It’s a common myth that mortgage brokers get secret incentives in the form of high commissions from the banks and other large lenders in order to secure loans. This is simply not the case. While it is common to lean towards certain lenders based on the application requirements, most mortgage brokers will look out for their client’s needs first. Failing to do so would mean a conflict of interest and an immediate damage to the brokerage’s reputation. If you are unsure of how to choose the right mortgage broker, read our article on how to choose the best mortgage broker for helpful advice.
As you can see from this blog, you can’t believe everything you hear. Now that you know the true facts behind mortgage brokers, you are now empowered to make the right decision for you and your family. With the right mortgage broker that has your best interests at heart, you will be well on your way to securing a brighter financial future now and for generations to come.
If you haven’t worked with a mortgage broker before and would like to see for yourself how you can benefit, read our reviews and give us a call to start your Discovery Session today. We offer many mortgage solutions including: home equity line of credit (HELOC), home equity loans, 2nd mortgages, debt consolidation, mortgage refinancing, bridge financing, stop power of sale and private mortgages.
We have helped thousands of Canadians make informed financial decisions, rebuild their credit and save money. We work quickly to get you the funds you need when you need them. For most applications, we can get you approved in as little as 1 hour and funding will take place within 5 to 8 business days after the paperwork has been completed. In a rush for cash? We can fund in as little as 2 business days – meaning you can get on with life faster. Discover the Burke Financial difference today.
