What does a mortgage broker do?

A mortgage broker’s job is to put you in touch with potential mortgage lenders. This individual will help you get the best possible deal on a mortgage that best suits your needs and financial situation. Everyone is unique, and their mortgage should be, too.

Real estate broker vs. mortgage broker: what’s the difference?

Real estate brokers and mortgage brokers serve complementary, yet very different roles. As we saw previously, a mortgage broker will help you secure a mortgage, whereas a real estate broker—better know as a real estate agent— will help you find your perfect home.

How do you choose a mortgage broker?

There is no “one-size-fits-all” answer to this question. You need to find someone you trust, who can provide you with the answers to any questions you might have. Ask as many questions as you like when you first meet with your broker, to discover whether they will suit your needs. As with house-hunting, the first person you meet may not be the right fit for you, but don’t be discouraged! Keep looking until you find the person who’s right for you. A good mortgage broker should instill confidence, answer your questions, and above all, offer you service that is tailored to your needs, and not solely to their own agenda.

How are mortgage brokers compensated?

Generally speaking, mortgage lenders compensate the broker. The broker may be entitled to a bonus or a percentage. You can discuss this remuneration with them when you meet. It’s important that your broker be transparent with you, so feel free to ask this question at your meeting.

What steps do I need to take?

As noted above, when you first meet with your broker they will want to get to know you, in order to provide recommendations in the future. They can also help you with your first pre-approval. This pre-approval exercise is hypothetical, based on figures provided by the broker, to give you an idea of the potential mortgage loan amount available to you. This won’t impact your credit rating, but it will provide you with ways to improve your chances of getting a better rate and, possibly, a better loan.

Next comes pre-qualification, which is a more concrete step than pre-approval because, at this stage, you will be informed of loan amount and, and be given an idea of the available mortgage rates. Also at this stage, you can also choose to lock in a preferred rate for a period ranging from 30 to 120 days.

Finally, the last step is the evaluation of your home by potential lenders. It’s a step often overlooked by consumers, but one that is very important. For example, if your home is a flood or pyrite risk, as is the case for some homes on Montreal’s South Shore, you may not be able to do business with certain lenders. But don’t worry: your broker will always be able to help you find the loan best suited to your situation, and make recommendations to you.

We recommend that you start this process at least a year before you purchase your first home, to put you in the best possible financial position. We all know that buying a home is stressful to begin with; a broker help you through the process.

A few questions to help you prepare for your first meeting with your mortgage broker

Below you’ll find some questions to help you get ready, based on information found on the Autorité des marchés financiers (AMF) website:

  1. Why do you want a mortgage?
  2. If you’ve already chosen your home, where is it located?
  3. When will you need a mortgage?
  4. What assets do you have? What debts do you have? 
  5. What is your employment status (salaried or self-employed)?
  6. Have you ever had credit problems?
  7. If you are applying to refinance, what is the approximate value of your home and the balance on your mortgage?

Here at APOGIA, we have a mortgage broker, Mélanie Lachaine, with whom we’ve been doing business for years, and whom we recommend highly to our customers. When asked what her job was, she told us it was more than just finding the best loan rate. She explained that it’s important to get to know the customer, before even starting the search for a mortgage. To be able to give them the best recommendations, it’s important to understand their needs, as well as their short- and long-term goals. But that’s not all. She also coaches her customers, educating them about their financial health and helping them to better understand their mortgages. Mélanie gives them all the tools they need to grow and to make informed choices about their finances, with a view to making a purchase.

To learn more, or to get the financial support you need, book an appointment with one of our advisors.