Mortgages do not need to be scary.
A lot of people think that a mortgage is a vastly complex product that can only be understood by well trained, specialists that can navigate the murky waters of mortgages.
Nothing could be further from the truth. Mortgages, while they might be more complicated than say a personal loan in terms of the paperwork, they are basically all the same.
You borrow money, you make monthly payments until it is paid back. Simple.
What makes mortgages vastly different? They are secured against what is considered "Real" property, or Real Estate. This is an immovable asset that operates under property laws and the title (ownership) of the property is managed by government. Every mortgage has "standard charge terms" that dictate the terms under which the loan is granted, including repayment, that is registered with each mortgage on the property title.
If you own your home, and you have a mortgage on the property, it means that for the value of that mortgage you are giving the lender the right to that amount of your property. This is why when we do not make our mortgage payments, the lender has the right to foreclose and then sell the property to recoup the money that they lent out. If there is remaining monies after the debt and all costs have been paid, then we get that money.
Every single Canadian has the right to seek out a mortgage on their own. They can walk into a bank, or credit union, or some other consumer facing lenders and get a mortgage. That is not the hard part.
Anytime we conduct a financial transaction it has an impact. When we borrow money, yes we get that injection of funds we need, but it also means that we have to pay it back. When we save money, we are building a nest egg. When we invest, we are accepting a risk in trade for profits on our investment.
What a mortgage broker does do is to help you better understand the various mortgage products that are out there. Each one can have a different impact on your future, and because this is the largest financial transaction most people will ever do, getting advice is important. A variable rate mortgage has different risks than a fixed rate mortgage. Just as a home equity line of credit is very different than a fixed open mortgage. Then there are the pre-payment penalties, and making sure that the mortgage you are in doesn't end up costing you more than it should. All things that if we each took the time could understand, but having someone who understands it all makes sense.
Not only that, but in most cases when you work with a mortgage broker, their service doesn't cost you anything. That is because the lender will pay a finders fee to the mortgage broker for the business.
Lenders recognize the value that mortgage brokers bring to their customers, and it is why so many focus on brokers to drive business. That has resulted in many mortgage broker focused lenders opening and driving more competition which results in lower rates, more product choice, and access to unique products.
If you are self employed, or have any other potential "complications" a mortgage broker can help and relieve a lot of the stress that would otherwise be yours alone to deal with.
In some cases you might also need to borrow some funds and you need to use a private lender. This is also where a good broker can come in handy to make sure you are getting the best possible rate, terms, and have an exit strategy. Private mortgages are far more expensive and you do not want to be stuck with a high interest debt hanging over your head for years.
So while the basics of a mortgage are really no different than any other debt, it does make sense to use a mortgage broker. They can get you access to more lenders, better rates, and a wide range of products to help you with your home financing needs. They can also help navigate more complicated scenarios where you would benefit from having someone in your corner.
Nothing can ever replace the well thought out, ethical, advice provided to you by a well trained and licensed mortgage professional. Technology can take your application, google can give you pages of information, but nothing can replace the personal care and attention of working with a person. A mortgage broker is someone who is there to support you, help you, and is someone you can hold accountable if they do not look out for your interests first. You can't do that to a computer, or google.
Talk to a couple of brokers before you decide who to use. Find someone who understands your needs and will give you the care and attention you deserve as a client. Once you have chosen someone, you need to work with just them. If you are working with more than one mortgage broker, lenders will get multiple applications, and your credit will be pulled several times. Not only is that harmful to you, you are asking several people to do a bunch of work, and only one of them will get paid for it. Everyone is trying to earn a living, so it is important that we treat each other with respect and fairness. If you are not happy with your broker, fire them and find another, but don't string them along - none of us like being treated like that.
We would really like it if you came to us here at Haystax for your mortgage needs. We have a lot of highly talented, experienced, professionals that are always happy to help. It is always our honour to help our customers, and we are grateful to be able to do so.
You can easily get started by visiting us at www.haystaxmortgage.ca
If you choose not to use Haystax, we will be sad, but that's OK too. We just want you to use a mortgage broker so you too can benefit from the support and advice.