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What, or Who is Mortgage Broker?
A Mortgage Broker is a highly motivated specialist, who is almost always paid on a pure commission basis. He offers consumers — particularly first-time buyers — a high degree of expertise and knowledge on the nuances of mortgages rarely found at the local bank. Mortgage Brokers also bring to the table access to a broad choice of mortgage products at rates seldom offered by a banker, mainly because they have such a wide choice of competing lenders to deal with. As a matter of interest "Mortgage Man" has over 20 such lenders.
In addition, they bring one other key ingredient to the table — they are sitting on the same side of it as the consumer on a consulting basis, with a host of lenders and their products on the other side. In other words, they represent a choice of lenders, and work for the consumer to get the best deal. For this independent consulting service the cost is usually very reasonable, if there is a charge at all. In most instances "Approved Mortgages" does not double-dip – if the lender pays him "Mortgage Man" does not generally charge a fee. An exception may be a low priced Mobile home where the fee earned is extremely nominal.
The label that Mortgage Brokers wore for years — that of "lenders of last resort" —
is fast becoming a thing of the past, with the number of high quality mortgages originated by Brokers now greatly exceeding the "difficult to qualify" business.
During the past decade, as competition between mortgage companies has heated up, Mortgage Brokers have become a significant channel of prime business origination for most financial institutions. Currently, if you choose to deal with an impartial Broker, your clients can access most lenders' products and generally get a better rate of interest than they could if they try to negotiate on their own.
At a recent conference of the Canadian Institute of Mortgage Brokers and Lendera panel of brokers and bankers said that Mortgage Brokers accounted for about 15% of all new mortgage business in Canada — worth $6-$10 billion dollars annually.
As Canadian banks reduce both the number of branches at which a mortgage can be obtained and the breadth of services offered at the remaining ones, consumers will increasingly seek alternatives, including both Brokers and the Internet or a combination of the two. ( www.canadawidemortgages.com)
There has been a sudden and dramatic upswing in the level of professionalism of mortgage brokers, as education requirements have been increased and the industry has become an organized community. With the down sizing of banks many qualified people have entered the Mortgage Broker ranks.
The financial services world is waking up to the need to "out source" origination to those best suited to do it — motivated, commissioned experts who offer customers choice. Most financial institutions now pay reasonable finders fees to brokers for finding and bringing in qualified business, thus making it a worthwhile career choice, particularly for displaced bank employees. This is also an excellent opportunity for Realtors, especially in BC where their license is easily transferred into that of a "Sub Mortgage Broker". With a list of past clients their probability for success is high
Finally, the ability of Mortgage Brokers to "niche market" particularly strong or well-priced products will give them the edge over banks who cannot promote their lowest rates for fear of cannibalizing their own profit margins. Everyone knows all banks are discounting, but have you ever seen an ad telling you
so? You're hearing this message only from Brokers, who bypass the silly cat-and-mouse games played with mortgage rates at the branch levels so that banks can avoid giving their lowest rates to all existing customers. So why use a bank or a "one bank" representative when a full-fledged Mortgage Broker can offer so much more. Call "Approved Mortgage" today and give your clients the break they deserve.
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