Buying a house and applying for a mortgage is the one of the biggest financial decisions most Canadians will undertake. The number of choices in this entire process, coupled with the significant impact these decisions will have on your financial wellbeing, can be overwhelming. This is especially true for first-time home buyers, or individuals with some barriers to applying for a mortgage, such as less than stellar credit, being self-employed or being new to Canada and still trying to adjust to all the cultural changes. Not only do you need to make a sound home purchase decision, to buy a home that you can truly be happy living and investing in, but you will also need a solid mortgage that you can qualify for and afford. This is where an experienced and dedicated mortgage broker can make all the difference.
Using a Mortgage Broker vs. Going to Your Bank
So how does using the services of a mortgage broker to apply for your mortgage differ from simply going to your bank, where you have existing accounts and a comfort level that comes from a being an established client? The main difference is that a mortgage officer at a bank solely represents that bank and earns commissions to secure your mortgage at that bank, whereas a mortgage broker is a licensed professional who has access to many mortgage lenders. A broker is therefore usually able to get you the best mortgage rate possible for your financial situation and home ownership goals.
The added value that such professionals contribute to the mortgage application process, which has become increasingly complex with the addition of new regulations and soaring home prices in some Canadian housing markets, is driving a trend toward a greater usage of mortgage brokers in recent years vs. the big banks:
While traditional banks still are used for mortgages by the majority of homeowners, “use of brokers is trending upward,” notes Monica Guido, manager of client relations with Canada Mortgage and Housing Corp. “It’s higher among first-time buyers. Finding a deal, or the desire to get the best rate, is the key reason people use a broker…”
In 2017, 39 per cent of homeowners used a broker to arrange their mortgage, up from 33 per cent in 2016, according to CMHC. – Toronto Star
Mortgage Brokers are Focused on Processing Successful Mortgage Applications
Banks offer many different types of services besides mortgages, such as credit cards, car loans, lines-of-credit, etc., kind of like a fast food restaurant offering a variety of menu options in additional to a standard “burger and fries.” Banks have a business model based on volume where they provide many services to as many customers as possible. A mortgage broker is more like a chip truck, with the owner working very hard to offer you the best burgers and poutine in town. No fancy overhead and storefront like a chain restaurant, or a big bank, but rather a modest chip truck offering tasty fair, at a good price. Only the good chip trucks turn enough profit to stay in business for a long time, as the quality of their menu items and their price makes all the difference; just like a mortgage broker, whose competence and reputation make them a valued professional to have on your side when applying for a loan, with the best rates and terms on the biggest purchase you will likely make… your home.
Mortgages Brokers Can Secure Great Rates and Terms to Match Your Needs
As an intermediary between a mortgage applicant and potentially dozens of lenders, a mortgage broker is typically in a better position to find you the best rates possible, as opposed to a mortgage loan officer who is limited by the available rates offered at their bank. Banks often have more stringent lending criteria, making a successful mortgage application for someone with financial barriers, or insufficient credit history more difficult. Mortgage brokers, however, know the various application criteria of the lenders they work with, so even if your application gets turned down, since you’ve already provided your financial details, a broker can simply go to a different lender and apply on your behalf.
Brokers only get a finder’s fee from the lender once an application is approved, so you pay the broker no direct fees. Mortgage Brokers are motivated to get you approved, as quickly as possible, with the best rate possible, so you will work with them and continue to do so in the future. If you get turned down at your bank and decide to go directly to another bank, you will need to start the whole mortgage application process again, with no assurances the next bank is any more willing to approve your application or offer you a better rate or better terms.
Brokers are Dedicated Mortgage Professionals
A mortgage loan officer at a bank might be new to the position and may not stay in that role for long before they move on to something else in the bank, which often has many positions for employees to choose from. Equally there are many mortgage brokers out there, and even though a new mortgage brokers is required to be licensed, they are still rather untested in a competitive marketplace where getting great rates and terms suited to their needs are very important for mortgage applicants.
A seasoned mortgage broker, however, will have longstanding relationships with reputable lenders and will know the nuances of various terms and options on any type of mortgage application. They don’t simply try to get you the lowest rates, while ignoring terms like high penalties or switching costs, without warning you about the implications of these mortgage products. These dedicated brokers are in it for the long-haul and know full well that reputation is everything. Their professional advice is offered independent of being tied to any particular lender, unlike a mortgage loan officer would be at a bank. If a client is happy with their rate and the terms they got on their mortgage, they are much more likely to go back to their mortgage broker when it comes time to renew or refinance, and they are more likely to recommend such a mortgage broker to their friends and family.
Hatch Has the Experience to Make Your Mortgage Work for You
Fortunately, Hatch provides the services of an award-winning and highly experienced broker to guide you through a successful mortgage application with great rates and great terms for your needs. Our Principal Broker, Dan Martel (aka Papa Bird) has over 30 years’ experience in the mortgage industry and a solid reputation for professional, personalized service.
Dan started his career in 1981 at the Bank of Nova Scotia and then moved on to mortgage brokerage Scott Moore. He has also worked at Royal Trust and HSBC before becoming a Senior Mortgage Broker at GR Financial, where he ultimately bought the company in 2003. In 2005, Dan received a lifetime achievement award from CIBC First Line, as a mortgage broker. Dan is also a founding member of the Canadian Institute of Mortgage Brokers.
Always the innovator, Dan founded Hatch Online Mortgages in 2013, well before the concept online mortgage applications became popular. He recognized early on that in today’s highly competitive and fast-paced world, applying for a mortgage should be made as easy and convenient as possible, without sacrificing service quality. Dan lives by a model of providing professional and personalized services for all clients of Hatch emphasizing that, “the key to long-term success is to be consistent and honest with clients.” Dan has established relationships with a select group of top notch, A-1 lenders so that Hatch can consistently offer great mortgage rates, all backed by the professionalism only an experienced broker can provide.
Apply for Your Mortgage Online with Hatch
If you want to experience the difference that Hatch can make for your new mortgage or to renew or refinance an existing mortgage, simply fill out our convenient online mortgage application and Hatch will get cracking right away to secure a mortgage that really works for you!