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What is a Mortgage Broker?

Robin Verhelst - Regina Saskatchewan
Mortgage Broker

Anyone who has been involved in purchasing a property and obtaining a mortgage has probably heard the term mortgage broker, but what exactly is a mortgage broker?

A mortgage broker is a qualified professional or company that works to bring borrowers and lenders together for the purpose of loan origination. Mortgage brokers provide their services (free of charge) to borrowers meaning they do the research and mortgage shopping for you. When the borrower decides on a mortgage product, the mortgage broker arranges the transaction between the borrower and the lender (who offers the selected product) and then collects a fee from that lender.

Mortgage brokers have vast knowledge and experience in working with the mortgage process. They are trained to find the best mortgage for each individual client, at the best rate available. It is important to remember that mortgage brokers work for you, not the lenders.

Mortgage brokers are more widely accepted and used in the United States than in Canada, but this is changing due to increased consumer awareness about mortgage broker services. A study by the Canada Mortgage and Housing Corporation (CMHC) indicated that by 2010, mortgage brokers in Canada would have approximately half of the market share in mortgage originations. As more and more Canadians are using mortgage broker services and having positive experiences, they are recommending it to their friends and family.

Why use a Mortgage Broker?

Using a mortgage broker does not cost you (the borrower) anything. So why not put a qualified and trained professional to work for you when looking for a mortgage? What have you got to lose? A mortgage broker will work for you to find the best mortgage financing that suits your individual needs. Mortgage brokers have access to a vast network of lenders which includes most of the major financial institutions in Canada. By having access to these lenders it means a better rate for you because it forces lenders to compete for your business. You do not have to settle for what your bank has to offer. Make them work for your business and with the help of a mortgage broker they will have to. (See: About Mortgage Brokers)