Mortgage broker or bank officer, that's the question?
Are mortgage broker evil? The answer will be the same if the question was
"Are lawyers evil?". There are always some bad apples in any industry.
There is a difference between a mortgage broker and a bank officer.
A mortgage broker works for himself or herself. A bank officer works for the bank.
A mortgage broker don't get paid if he/she does not close on a deal. A bank officer
on the other hand still get his salary at the end of the month whether or not he closes
a deal.
If you are working for yourself, aren't you going to be more diligent, hard working,
and do your best for the clients.
Canadian mortgage brokers get paid a fee by the financial institution when he is successful
in closing a mortgage deal on behalf of the financial institution. The fee is pretty
much based on the amount and term of the mortgage. Interest rate does not affect the
fee.
Therefore Canadian mortgage broker has all the incentive to seek the lowest possible rate
for you from a number of financial institutions, just so that he can close the deal and
get paid. There is no benefit to the broker to quote a higher rate.
On the other hand the U.S. mortgage broker works differently. The U.S. mortgage broker
gets an interest quote from the lending institutions and add a small percentage for his fees.
The more the mortgage broker adds the higher his fees. His or her incentive is therefore
to quote you a higher rate as far as possible.
All Canadian mortgage brokers are licensed and regulated by the Provincial authorities.
Most Canadian mortgage brokers are likely to be member of one or more of the
professional mortgage broker associations such as:
Canadian Association of Accredited Mortgage Professionals (CAAMP)
formerly Canadian Institute of Mortgage Brokers and Lenders (CIMBL)
Mortgage Broker Association of British Columbia
Alberta Mortgage Brokers Association
Many mortgage brokers are also Accredited Mortgage Professional (AMP).
The AMP is a national designation for mortgage professionals in Canada.
Launched in January 2004, the AMP designation was developed as part of
CAAMP’s ongoing commitment to increasing the level of professionalism
in Canada’s mortgage industry through the development of educational
and ethical standards. The AMP designation sets a single national
proficiency standard for Canada’s mortgage professionals.
There are certain advantages to deal with a mortgage broker:
Canada Mortgage broker can negotiate rates on your behalf with a large number
of lenders concurrently. Sometimes they play one lender against another lender to
your benefit.
You only need to fill one application. The Mortgage broker
will use this standard application to approach as many lenders as are necessary to
get your mortgage approved. If you have to do it on your own, you will have to visit
many lenders across the city and fill many application forms.
You do not pay any fee to the mortgage broker. The mortgage broker works
for you for free and get paid by the lenders. Only in rare cases you may have to
pay a fee but the mortgage broker must advise you upfront.
Canada mortgage broker checks your credit rating only once. If you deal directly
with lenders, each lender will check your credit status separately and may result
in a deterioration of your credit score.
Canada mortgage brokers have to abide by the guidelines and ethical directions of the
Canadian Mortgage Broker Associations such as:
Mortgage Brokers Association of British Columbia (MBABC) ...Learn more
Canadian Association of Accredited Mortgage Professionals (CAAMP) formerly
Canadian Institute of Mortgage Brokers and Lenders (CIMBL) ...Learn more
Alberta Mortgage Brokers Association ...learn more
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