Calgary homebuyers used to consider mortgage brokers as a last resort, but reports indicate that more and more homebuyers are closing deals with brokers than with banks. Perhaps it helps that brokers have been marketing themselves heavily over the past few years, but surely there must be some logic and some better explanations for this trend.
Why are you advised to hire a broker?
Simply put, choosing the right Calgary mortgage broker has the potential to land you a better mortgage deal. With a broker’s more extensive network, he is more capable of seeking out your options. Since your broker practically lives and breathes mortgage, he’ll know about some things you don’t, and that includes where to find good deals.
Of course, the entire point of hiring a mortgage broker is because you want an expert helping you out. For this reason, it’s best to find someone with an Accredited Mortgage Professional (AMP) designation. This ensures that your broker meets certain professional requirements and that he has undergone pertinent training. And this is training that you have not had, leaving no question that a broker with the right credentials is better qualified to find a suitable mortgage than you are.
Moreover, there’s a trend in Calgary now in which brokers are starting to act as planners. This means that with a broker, you receive more attention to your overall finances, and thus, more personalized advice on your best course of action.
Mortgage broker versus bank
Now, there’s this perception that brokers are superfluous because you can simply go to your bank and get the best deals. This is a naïve assumption that can cost you.
- With a broker, you save yourself the time of going to each bank one by one. And it’s not just a matter of leaving your broker to do the dirty work. Since your broker is more familiar with the different lenders, their policies and preferences, he will have a more organized way of conducting the search for you, as he’ll know which lenders are a better match.
- Every time a bank pulls up your credit score, there’s a chance that you credit score drops, as Equifax or TransUnion might think you’ve been rejected for a mortgage. On the other hand, a mortgage broker will only pull up your score once, keeping your score intact.
- A bank doesn’t necessarily provide the best deals. It lacks the flexibility and breadth of options that a broker with an extensive network can provide.
What you should know
With all that said, the fact remains that you can’t be too reliant on a mortgage broker. Simply hiring one does not solve all your financial concerns. Of course, a lot hinges on whether you find the right broker; but even then, you shouldn’t rest on your laurels. Broker or no broker, here are some things you have to do on your own:
- Obviously, looking for a suitable broker rests on your shoulders. It’s also your responsibility to verify your broker’s credentials. Interview him in order to assess his trustworthiness, competence, and scope of network.
- It’s your job to maintain a good credit rating. Even with the best Calgary mortgage broker in tow, you can’t get the best deals if you’ve been slacking off on your loan or credit card payments. Your broker is an adviser, not a magician.
- Your broker should be able to explain industry jargon in a relatable way, but it’s up to you to study your own finances. Moreover, it falls on you to provide accurate data so that your broker can find a deal that better matches your financial goals.
- At the end of the day, you make your own decisions, not your broker. A mortgage broker can do all the tiresome work of hunting for deals and reviewing documentation, but you have the say-so, and your signature seals the deal. And even with the best deal in town, it’s your decision to make good on your payments and assume financial responsibility.