If you’re interested in saving money when you decide to buy a home (and why wouldn’t you be), then shopping around for the best mortgage rate becomes essential. However, not everyone likes to spend time doing comparison shopping, so there is an alternative known as a mortgage broker.
A mortgage broker in Mississauga is not just for the lazy, however. Some individuals, especially those with poor credit histories, may have an especially difficult time securing an affordable mortgage (or even any mortgage at all at any interest rate). A mortgage broker can help you find any lenders who are willing to work with you under these circumstances.
Other reasons for acquiring the services of a broker include wanting to purchase unusual properties such as co-ops and tenancies in common, neither of which tend to appeal to many lenders. Again, if you have credit problems or are looking to borrow more than 80% of the property’s value (in other words, if you can’t come up with a 20% down payment), you may need help finding an accommodating lender.
Still, you should be careful to find out a few things before choosing whom to work with. First of all, what kind of commission is the broker getting? This would be a factor if you were paying the commission, but it’s still important even if the lender covers the commission. You are ultimately paying for the loan and thus, the commission itself. Moreover, the interest rate you end up with may take into account the commission the broker will receive. Thus, you should never be embarrassed about asking what kind of commission your mortgage consultant might receive.
A typical commission rate, by the way, is probably between 0.5% and 2% of the total loan amount. Anything outside of this range may give you some pause.
In addition, you should make a note of what kind of lenders the broker tends to deal with. Is he always focusing on the same few lenders? Perhaps he has some sort of deal arranged with a specific mortgage lender or simply does not want to take the time to investigate other banks to find the best rate possible. You need to make sure you are receiving the best rate your broker can find and not simply a sales pitch for a particular lending company.
Don’t be ashamed to ask the mortgage broker what kind of commission he will receive from your loan. The commission is negotiable, and even if the bank is paying for this commission, you’re ultimately paying because you are the one taking on the mortgage.
Deciding whether to use the services of the mortgage broker can also come down to your personality. If you hate shopping at the mall for a gift because you would rather be spending your time watching your favorite sports team, you may be the kind of person who would appreciate the advantages of a good mortgage broker in Mississauga.
Ultimately, it’s up to you whether you want to hire a broker in Mississauga to help you choose your mortgage loan. These simple tips can help you make a better decision when it comes time to choose a lender.