The past newsletters have
been directed toward the potential of saving you money
in the long run. This edition is no different, but
instead of supplying direct strategies and particular mortgage
situations, let's talk about some of the advantages of
using a mortgage broker - it's still about saving your
money.
But there's more to using
a mortgage broker than saving money. It's true. In
yesteryears a mortgage broker was only called upon as
a
"closer" for the folks who didn't fit traditional banking
guidelines. Usually the client was faced with higher
than average interest rates and fees attached for using
mortgage broker services. Times have certainly changed
since those days. As well as saving you money, mortgage
brokers today are used for many other reasons.
Let's start with how we get
the low interest rates that we do! Simply put - as
independent mortgage agents, we have no overhead. Bank
branches have to pay salaries, office expenses, etc.
They have to meet a certain quota to pay for their expenses;
hence the invention of "posted rates". They must meet
a certain benchmark for their "return on investment" when
they lend their money for a mortgage. Price it too
low, and the branch does not meet their numbers at the end
of the month. They don't like that.
So why then, can a mortgage
broker use the SAME bank and get you lower than their posted
rates? It doesn't seem quite fair, especially since
I'm not the customer. However, it is true - I can
place you back to your very same bank and get you a better
rate than what they would give you over the counter (most
of the time). Well, here's how: those banks have
a "broker services" department that the public is not privy
to.
Broker services are available only to licensed mortgage agents
and are given "discounted rates" for the mortgage agent to
pass on to the customer. Banks are simply using mortgage
brokers as a vehicle for more business. Now you know
where those discounted rates originate.
How does a mortgage broker
get paid? The banks pay us for placing a mortgage
with their institution. It's not too often that we
have to charge a fee to our customer; that only happens
when the bank that we are dealing with (usually private
lenders) don't pay the broker a fee. In an instance
like that, the customer is always told at the beginning
that there will be a fee charged. There are no hidden
fees involved in ANY transaction.
How valuable is your time? Do
you suppose you'd consider letting a mortgage professional
spend their time looking for a suitable mortgage for YOU
while you are doing what needs to be done in YOUR day? Where's
the disadvantage here? We're getting you discounted
rates (that only brokers can get on a daily basis), and
shopping FOR you.
Let's look at the flipside
a moment... Suppose you want a mortgage, and you decide
that you're going to play all the banks against each other
so that you get the best deal. You start at one end
of the city, and hit all the major players, giving them
your information so that they can get back to you during
their "bank hours".
After all that running around, you may be surprised in knowing
that we can come in and beat those rates from our everyday
rates that we receive. It happens all the time.
Those are just a few reasons
why it's beneficial to use a mortgage broker - perhaps
you can find more reasons? Let us know if you have
mortgage questions - it's what we do!
Sincerely,
DAN MASS, AMP Broker/Agent
Canada First Mortgage
direct: 403.294.0033 cell: 403.710.1505 fax: 1-866-902-4910
email: dan@canadafirstmortgage.com
website: www.canadafirstmortgage.com
Calgary, Alberta, Canada T2Z 4G2
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