What is a Mortgage Broker and why do I need one in the Durham Region?
A Mortgage Broker is like a matchmaker but instead of finding a partner for you, they find you a mortgage. They have both the training and the experience to search the mortgage market for the best mortgage to suit your specific needs.
A lot of people don’t know that there are a myriad of lenders out there besides the big 5 banks. These lenders, who may be insurance companies; pension funds; large institutional investment companies and so on, don’t have offices that are open to the public. They rely on Mortgage Brokers to find suitable mortgages for them to invest in.
At the same time, many people do not fit into the nice, tidy boxes that the big banks like to use when assessing mortgage applications. Some people who are self-employed may have trouble proving income; spouses who receive child support payments may not be able to include it for mortgage purposes; some people have multiple part time jobs but don’t get the credit scores necessary to qualify for “A” lenders.
That is where the lending market gets a little tricky. There are many “B” lenders out there to fill the gap but they choose to deal with Mortgage Brokers only. The broker can do the “heavy lifting’ and complete the applications; provide the back-up documentation to prove income; get statements from existing debtors to show up-to-date payments etc. The broker will be knowledgeable about each lenders requirements and can select one that will best suit this particular borrower.
There are also decisions to make regarding the length of the mortgage; the interest rate and the amortization (the time over which the mortgage would be paid in full). Each lender has requirements about the amount of your income that can be used to pay the mortgage. This will determine the maximum amount you can borrow. The Broker can help you with all these decisions.
It is recommended that you see a Mortgage Broker as soon as you make the decision to purchase a house. This will give you a guidelines as to what price range you should reasonably be looking in and will give your real estate agent a good place to start looking on your behalf. If you need some help finding a Mortgage Broker that you can trust and feel comfortable working with contact us at McMurter & Associates.
Finding a Mortgage Broker is not the first step in buying a home. For information on the first thing to do when you begin looking for your dream home, please read here.