Q. - Why should I use you, I have a good
relationship with the bank?
A. -
While it is important to have a good relationship with your bank, the
account manager at the bank represents that particular bank, and only the
products that they sell. We have access to over 40 lenders, including
banks. We are able to shop the various lenders to find the best rate for
your situation..
Q. - I thought that brokers are lenders of last
resort.
A. -
This has been true in the past, but today Mortgage Brokers represent a large
portion of all mortgages that are approved today. We have access to over
40 lenders were we place millions in mortgages each year. This
enables us to negotiate larger discounts based on our volume and pass these
savings on to you.
Q. - Is there a fee for your
service?
A. -
Generally, there are no fees for using our services as we are paid by the
lenders directly. In rare occasions
fees may apply if the borrower does not qualify with
traditional lenders. When a private lender is used, a fee is charged by
the brokerage. The general rule in determining if we would charge a fee
is simple. If you qualify for a mortgage from one of the
major banks or finance companies there is no charge. If you do not and we
are successful in finding a private lender to accept,
a fee will apply. We will always disclose if there is a fee before
proceeding.
Q. - My Bank Manager and I are good friends and
he would not take advantage of me.
A. -
While it is true that your friend would not take advantage or you, unfortunately
they only offer you the products that they sell at that particular bank.
Because each mortgage situation is different, many lenders have preferred rates
depending on your credit score, equity etc.
Q. - I can shop for the best deal myself why
should I use you?
A. -
While it may be possible to shop for the best rates yourself, it is unlikely
that the volume discounts that we receive will be passed on to you if you
approach the particular institution on your own. Also, why spend your time
approaching several lenders when one application with us gives you access to the
preferred rates and various lenders. No other shopping is required!
We will shop on your behalf.
Q. - My bank offers the best rates why should I
use you?
A. - Your bank may be competitive, however, most people have found that the
rates we offer is better that there own bank. In most instances we have the
ability to deal with your bank and get you the best discount.
Q. - Why are you able to get such good rates?
A. - This is a good question. Firstly, we are able to get great rates
because of our volume. We place millions of dollars worth of mortgage annually
and we receive discounts based on that volume. Secondly, we are a cheaper source
of business for the banks as they only pay us when they accept a mortgage we
send them. The branch system is a fixed cost and that is a more expensive way
for the banks to generate business compared to using brokers who are a variable
cost.
Q. - It sounds too easy; there must be a catch?
A. - There is no catch, The financial institutions
have realized that Mortgage Brokers bring clients to them without the many costs
associated with having a branch. Education has allowed us to get
the word out and the knowledgeable borrowers are taking advantage of this
service.
Q. - What term should I take?
A. - Deciding what term to take is a personal question and is based on many
variables based such as interest rate trends, income, job stability etc.
However, a good rule to use in determining what term you should consider can be
based on a couple of factors. If you are in a career where you have great
opportunity to increase your income or may come into some money and you have a
tolerance for interest rate fluctuations, you should consider a short-term or
variable mortgage. If however, you are in a career where the chances of large
increase in pay is not likely, or you do not have the ability to absorb a large
increase in interest rate and the subsequent increase in mortgage payments, you
should consider a long term mortgage (5y, 7yr or 10yr). Most mortgages have
generous prepayment privilege as well as portability clauses so that it is
possible to pay down the mortgage quickly or move it to another property should
you sell. You should discuss this with one of our consultants, they would be
happy to advise you.
Q. - Is it better to take the cash back or the
discount?
A. - The cash back option is a good option but one that you must weight
carefully. 3% cash back is equivalent to .75% discount. You then should compare
this to what discounts are available and if you can get a 1% discount you are
better off taking the discount. If on the other hand you need the cash back for
closing cost, renovations or you need to buy new appliances you may be better
off to take the cash back. It is best that you discuss this with us prior to
making a decision.
Q. - I would like to pay my mortgage as fast as
possible, what should I do?
A. - Paying off a mortgage is a dream that many Canadians have and it is a
good goal to strive towards. However, a better option would be to maximize your
RRSP contributions. Once you have done this you can then concentrate on paying
down your mortgage. In many instances you can contribute to your RRSP and take
your tax refund and apply it to the mortgage as a pre-payment thereby,
accomplishing both.
Q. - I have never heard of the lender that you
are recommending should we be concerned?
A. - Using a lender that you do not know is not usually a problem as they
are lending you the money not the other way around. Most of these lenders only
use brokers and do not have to support the very expensive branch system and can
afford to be more competitive. If you are still concerned about this and would
like to have your mortgage with a major lender, we will only send your request
to major lenders.
Q. - What do brokers do and do other people
really use brokers?
A. - We specialize in Mortgage financing and we work hard
at getting you the best deal. We represent you to the lenders and act on
your behalf in negotiating the best deal. In the U.S. 75% of all mortgages are
placed by brokers just like us. This figure is quite a bit lower in Canada as we
are generally 5-7 years behind the U.S. but things are changing quickly and
business has increased by 75% in the past few
years. This increase is largely due to
consumers becoming aware of brokers and the benefits of using a broker.
Q. - I have heard that your mortgages have
strange clauses is this true?
A. - Most of the lenders are very similar with respect to their clauses,
prepayment privilege, portability etc. After all, it is a very competitive
market and one lender cannot afford to be placed at a disadvantage because of
this. In any case you will be notified prior to you accepting a mortgage of any
and all clauses to be inserted in the mortgage.
CERTIFIED DAILY
Ontario Mortgages from Ontario Mortgage Brokers
MortgageSearchOntario.ca's
owner, Chris Rea, is an Accredited Mortgage Professional with Discount Mortgage
Canada Inc. (1-1770 King St. East, Kitchener ON N2G 2P1). 
