Why do I need a mortgage broker?

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For something as seemingly straightforward as buying a home, the mortgage process can feel overwhelmingly complex. One element of the purchasing process that causes confusion among home buyers is whether or not to use a mortgage broker. A mortgage broker is an intermediary between borrowers and lenders. Their job is to find the right loan and lender for borrowers, ensuring a smooth mortgage process for all parties involved.

According to the Canada Mortgage Housing Corporation’s 2015 Mortgage Consumer Survey, mortgage broker market share is trending upwards for most market segments. This is particularly evident among repeat buyers where market share has increased from 32% in 2012 to 42% in 2015. Over this time period broker share has also increased among first-time buyers (48% to 55%) and refinancers (27% to 33%). Among renewers, broker share has remained stable at around 21%.

So should you be one of the growing individuals who turn to a mortgage broker when purchasing a home? The following are some of the benefits brokers can offer:

Rates
If you want to make sure you’re getting the best rate possible, working with a mortgage broker can take a lot of the guesswork out of the equation. Brokers have access to a large network of different lenders, helping them to find the best interest rates for your type of loan.

Payment
You can work with a mortgage broker without having to worry about hidden fees. Mortgage brokers’ livelihoods depend on the quality of their services, not on charging borrowers. They get paid a commission from lenders. Brokers also have more incentive to find the best mortgages for borrowers, since they don’t get paid until your mortgage funds.

Options
Your first instinct might be to approach your current financial institution when the time comes to take out a home loan. However, being a customer doesn’t always guarantee approval, or lowest interest rates. Mortgage brokers deal with multiple lenders, allowing them to canvass a much larger area when searching for your loan. While your bank may deny you a loan or charge higher interest rates, brokers have the capability to find a lender that won’t.