21 Sep

Mortgage Broker vs Mortgage Specialist.

General

Posted by: Justin Charron

broker vs specialist: what’s the difference?

To most consumers outside of the mortgage space, the terms “mortgage broker” and “mortgage specialist” would seem interchangeable – but they aren’t. As a potential homeowner, the differences are more important than you might think.

First and foremost, it is important to understand the definition of these groups before looking at the major differences. Mortgage brokers belong to an independent firm. This allows them unique access to rates and offers from various lenders’ (banks, credit unions, private lenders and alternative options). Conversely, a mortgage specialist is employed by a single lender and works to sell that particular institution’s products.

BENEFITS OF WORKING WITH A MORTGAGE BROKER:
1. MORTGAGE BROKERS WORK FOR YOU!
Mortgage Broker vs Specialist

Unlike a mortgage specialist, who is paid by the bank to sell their products, a broker works for YOU! A broker works as a link between you and the lender; they filter through the offerings to find you the best rate and product. The best part? A mortgage broker’s services are FREE! Brokers are paid by the lender of choice once the ideal mortgage product has been found. This means you get to utilize their expert advice and lender access at no cost!

2. MORTGAGE BROKERS CARE FOR THEIR CLIENTS

Similarly to the above, Mortgage Brokers care for their clients. Not only because they work for YOU but also because most brokers are self-employed and rely on referrals. As a majority of their business is done through word-of-mouth, this results in the best experience for clients. Every DLC Mortgage Broker is motivated to help you achieve your dream of home ownership!

3. MORTGAGE BROKERS ARE LICENSED PROFESSIONALS!

It might surprise you to know that mortgage and bank specialists are not required to have any formal training. While some lenders do provide in-house training, this varies from the provincially regulated course that mortgage brokers are required to pass. Mortgage brokers also continue to maintain their education through license renewals and educational courses. As a result, a mortgage broker provides expert advice you can trust!

4. MORTGAGE BROKERS HAVE GREATER ACCESS TO RATES

A mortgage broker is employed by an independent firm and has access to 90+ lenders, while a mortgage specialist can only access their particular lenders’ products. This can mean a big difference in rates and mortgage terms for homeowners! If you are looking at getting a mortgage with your bank (say Bank X), then your mortgage specialist can tell you exactly what Bank X offers. But, by seeking the advice of a mortgage broker, they can tell you what Bank X offers… as well as your options with Bank Y, Bank Z, Bank A, etc. When you are looking for the best mortgage product to fit your unique needs, more options to choose from just makes sense!

5. MORTGAGE BROKERS FOCUS ON MORTGAGES

When it comes to mortgage brokers, all they do is mortgages; they live and breath home ownership! Mortgage specialists and bank staff are often trained with a focus on cross-selling. While you may have booked an appointment to discuss a mortgage, many times they will focus on other bank products. This might include offering credit cards, insurance, RRSP, lines of credit, etc. This can sometimes be helpful, but many potential homeowners may find it overwhelming or pushy; especially when they are specifically looking for a single product – a mortgage.

6. MORTGAGE BROKERS OFFER FLEXIBLE HOURS

Most banks don’t offer great business hours, which can make it hard to book an appointment with a specialist. As many mortgage brokers are self-employed, they are motivated to assist clients. This means they are often available for appointments outside of business hours such as evenings or weekends. This can be especially comforting to individuals who are new to the mortgage process and may have questions or concerns that they would prefer to have answered right away.

 

Published by DLC Marketing Team

15 Sep

10 Mortgage Mistakes

Mortgage Tips

Posted by: Justin Charron

Whether it is your first house or you’re moving to a new neighborhood, getting approved for a mortgage is exciting! However, even if you have been approved and are simply waiting to close, there are still some things to keep in mind to ensure your efforts are successful.

Many homeowners believe that if you have been approved for a mortgage, you are good to go. However, your lender or mortgage insurance provider will often run a final credit report before completion to ensure that nothing has changed. Changes in your credit usage and score could affect what you qualify for – or whether or not you get your mortgage at all.

To avoid having your mortgage approval status reversed or jeopardizing your financing, be sure to stay away from these 10 mortgage mistakes:

1. BEEFING UP YOUR APPLICATION

This is not a time to try and ‘beef up’ your financials; you must be honest on your mortgage application. This is especially true when seeking the advice of a mortgage professional, as their main goal is to assist you in your home buying journey. Providing accurate information surrounding your income, properties owned, debts, assets and your financial past is critical. If you have been through a foreclosure, bankruptcy or consumer proposal, disclose this right away as well. We are here to help!

2. GETTING PRE-APPROVED

With all the changes and qualifying requirements surrounding mortgages, it is a mistake to assume that you will be approved. Many things can influence whether or not you qualify for financing such as unknown changes to your credit report, mortgage product updates or rate changes. Getting pre-approved is the first step to ensuring you are on the right track and securing that mortgage! Most banks consider pre-approval to be valid for four months. So, even if you aren’t house-hunting tomorrow, getting pre-approved NOW will come in handy if a new home is in your near future.

3. SHOPPING AROUND

One of the biggest mistakes people make when signing for a mortgage is not shopping around. It is easy to simply sign up with your existing bank, but you could be paying thousands more than you need to, without even knowing it! This is where a mortgage broker can help! With access to hundreds of lenders and financial institutions, a mortgage professional can help you find a mortgage with the best rate and terms to suit YOUR needs.

4. NOT SAVING FOR A DOWN PAYMENT

Your down payment is a critical part of homeownership and a useful financial tool that you should utilize when purchasing a home. A down payment reduces the overall amount of financing you need and increases the amount of equity right from the start. Down payments also show the bank you are serious. In Canada, the minimum down payment is 5% (with mortgage insurance), with the recommended being 20% if possible.

5. CHANGING EMPLOYERS OR JOBS        

As employment is one of the most important factors that determines whether or not you qualify for financing, it is important not to change employers if you are in the middle of the approval process. Banks prefer to see a long tenure with your employer, as it indicates financial stability. It is best to wait for any major career changes until after your mortgage has been approved and you have the keys to your new home!

6. APPLYING OR CO-SIGNING FOR OTHER LOANS

Applying for additional loans or financing while you are currently in the midst of finalizing a mortgage contract can drastically affect what you qualify for – it can even jeopardize your credit rating! Save any big purchases, such as a new car, until after your mortgage has been finalized.

Also, just as applying for new loans can wreak havoc on a mortgage application, so can co-signing for other loans. Co-signing signifies that you can handle the full responsibility of the debt if the other individual defaults. As a result, this will show up on your credit report and can become a liability on your application, potentially lowering your borrowing power.

7. AVOIDING CREDIT MISSTEPS

As mortgage financing is contingent on your credit score and your current debt, it is important to keep these things healthy during the course of mortgage approval. Do not go over any limits on your cards or lines of credit, or miss any payment dates during the time your finances are being reviewed. This will affect whether or not the lender sees you as a responsible borrower.

Also, although you might think an application with less debt available to use would be something a bank would favor, credit scores actually increase the longer a card is open and in good standing. Having unused available credit and cards open for a long duration with a good history of repayment is a good thing! In fact, if you lower the level of your available credit (especially in the midst of an application) it could lower your credit score.

8. HAVING TOO MUCH DEBT

Credit card debt is on the rise and overuse of lines of credit can put you at risk for debt overload. Large purchases such as new truck or boat can push your total debt servicing ratio over the limit (how much you owe versus how much you make), making it impossible to receive financing. Some homeowners have so much consumer debt that they aren’t even able to refinance their home to consolidate that debt. Before you start considering a new home, make sure your current debt is under control.

9. LARGE DEPOSITS

Just as now is not the time for new loans, it is also not the time for large deposits or “mattress money” to come into your account. The bank requires a three-month history of all down payments and funds for the mortgage when purchasing property. Any deposits outside of your employment or pension income will need to be verified with a paper trail – such as a bill of sale for a vehicle, or income tax credit receipts. Unexplained deposits can delay your mortgage financing, or put it in jeopardy if they cannot be explained.

10. MARRYING INTO POOR CREDIT

Having the financial talk before getting hitched continues to be critical for your financial future. Your partner’s credit can affect your ability to get approved for a mortgage. If there are unexpected financial issues with your partner’s credit history, make sure to have a discussion with your mortgage broker before you start shopping for a new home.

If you are currently in the midst of a mortgage application, or are looking to start the process, don’t hesitate to reach out to a Dominion Lending Centres Mortgage Professional today to ensure that you do things the RIGHT way to succeed with your home purchase.

Published by DLC Marketing Team

8 Sep

Choosing Your Mortgage Broker

General

Posted by: Justin Charron

There is a little doubt that the biggest purchase of your life will be your home. When embarking on your homeownership journey, having the right support and information will make all the difference. Fortunately, a mortgage broker can help!

With access to more than 230 lending institutions including big banks, credit unions and trust companies, mortgage brokers are experts in mortgages. These connections allow them familiarity with a vast array of available mortgage products, and also ensures that the advice they offer is unbiased. Unlike banks focused on signing you for profit reasons, a mortgage broker is a third-party service who gets paid no matter which bank they sign you with. This means they can provide the best rate AND unbiased advice because they are focused on helping you achieve your dream.

It is estimated there are nearly 20,000 mortgage professionals in Canada. With so many choices, it is important to find a mortgage broker who works best FOR you.

With so much information at your fingertips on any given broker, it is easier to help narrow down the search. Especially with tools like the Dominion Lending Centres exclusive My Mortgage Toolbox app. Available on Google Play and the iStore, My Mortgage Toolbox makes it easy for potential homeowners to find a mortgage broker nearest them!

“The idea behind My Mortgage Toolbox was to make it simple for Canadians to manage the mortgage process by putting all the information they need into the palm of their hand,” noted Gary Mauris, Founder and CEO of Dominion Lending Centres.

Some features available through this application include a variety of calculators to help clients determine:

  1. What they can afford
  2. The minimum down payment required
  3. Closing cost estimates
  4. Total monthly ownership costs

Click here to download the app today!

While online tools and apps can give you pretty good insight into a potential broker, there are a few other things you might also want to consider to help make that decision a little easier.

While it is never a bad idea to go with an established professional with an abundance of clients and years of experience, you should also open to considering newer, hungrier brokers who are striving to make their mark in the mortgage space. At a busy firm, it is easy for you to feel like a small fish in a big pond, especially with a smaller portfolio, whereas a smaller brokerage can likely provide you more attention.

While brokers spend a lot of their time neck-deep in mortgages and tend to use industry jargon, a professional broker will understand if you are a first time homebuyer and will do their best to explain the terms and the process to you. Understanding is vital in your homeownership journey so make sure to seek out a broker who is going to keep it simple for you and be honest, allowing you to understand exactly what you’re getting in your mortgage.

Ultimately, it comes down to the mortgage product but don’t be blinded by interest rates. It is important that your broker explains everything to you from term conditions to penalties, as well as why you qualified for the rate you need. It is also important to use caution if a broker is selling you on a rate and making promises to pay for fee; this is a red flag. If they say they’re going to pay for everything, they’re desperate for anything.

Of course, the rate matters, but the characteristics of your mortgage matter more and could end up costing you in the long run. You want a broker who’s going to listen to you and ask you about your needs and future goals. What are your plans five or ten years from now? Why are they so important to you as an individual? When looking at any mortgage product, consider that nearly 70 percent of mortgages are broken within three years. Even if you’re sure of today, life happens and tomorrow could be different. Therefore, you must consider the penalties for ducking out of your mortgage earlier and you should know if it is portable.

The best mortgage brokers in the business will make sure all of your bases are covered, and you’re fully aware of what you’re signing onto. The right broker will make the process easier for you, whether it’s buying your first home, shopping for a better rate, or even jumping into investment properties. No matter what stage of life you are in, we’ve got a mortgage product – and a broker – for that!

 

Published by DLC Marketing Team