5 Things Your Mortgage Broker Won’t Tell You
The following information has been provided by Nicole Daoust, Senior Mortgage Specialist at RBC. For more information, please contact Nicole at 705-728-5832.
- Commission is my friend.
As a borrower, you don’t typically compensate your broker. It’s lenders who shell out commissions and finder’s fees. A conflict of interest? Could be, especially if one lender pays more than another and that monetary temptation results in a worse deal for you, says John Andrew, a professor of real estate at Queen’s University. “If there’s even a 0.1% difference in the interest rate you get, that can have huge implications for the total cost of your mortgage.”
- Um, I don’t actually negotiate with 40 lenders.
Despite what some brokers claim, it’s usually more like three or four, says Rob McLister of canadianmortgagetrends.com. And for good reason: there are learning curves, volume minimum, and some lenders simply don’t pay as much in commission. In fact, a number of the big banks use their own salespeople and closed down broker channels years ago. “So if they’re not going to get paid, the average broker is going to think, ‘Why spend the time on them?’”
- I’m a newbie. In the brokerage business, experience matters.
Although anybody can track and negotiate interest rates, it takes a seasoned pro to handle trickier situations like shaky credit history or self-employment, and to know which mortgages have deal-breaking loopholes.
- The fine print matters.
Most borrowers focus on getting the best rate but brokers know it pays to delve deep into a mortgage’s terms and conditions, says Andrew. Can you increase or decrease monthly payments, or throw lump sums at the principal? How costly would it be to break the mortgage? These concerns are just as critical as rates.
- I’m not a miracle worker.
There’s only so much a mortgage broker can do for you if you walk in with a credit score of 600 and a trail of unpaid bills. Lenders see you as a high-risk proposition and no broker will convince them to give you a rock-bottom mortgage rate reserved for triple-A clients. Be Realistic.
Whether you’re about to buy your first home, or your fifteenth, you can always benefit from the professional services of an RBC mobile mortgage specialist. Nicole Daoust can provide the right level of advice, products and strategies you need to make your home buying dream a reality.