When you apply for a mortgage, the two parties to the matter are somewhat against each other. The borrower wants to get the best (lowest) interest rate possible and the lender wants to get the most earnings (highest rate). A mortgage consultant (courtier hypothécaire) will step in to assist the home buyer and lending institution to come to terms over the mortgage so it gets done.
Is the broker on the side of the lender or the borrower in this situation? When you hear that the lending institution pays the broker’s commission, you may assume that the broker is going to work for the interests of the lender. This is not what happens.
The mortgage business is extremely competitive, especially in Canada. There are some mortgage consultants (courtier hypothecaire) who produce many billions of dollars of home loans each year. Lending institutions want to work with brokers to increase their mortgage business.
The lending institutions pay all of the brokers about the same fee. Therefore, brokers (courtier hypothécaire) are fairly independent, since they will make the same fees from any one of the many lenders. The borrowers are pleased that the lender pays the fee, and he does not pay it.
Here is what this kind of competition means:
-Lenders team up brokers to be exposed to more loan business
-A potential borrower’s file can be seen by 50 or more lenders, without any added burden on the borrower.
This is why the borrower can be considered a client of the broker (courtier hypothécaire). A broker wants to get the best mortgage package for each of his clients.
Since a broker will make the identical fee from any lender, his aim will be:
• Make sure his clients are satisfied and will become repeat customers
• Make sure his clients are happy and will recommend him to others
Mortgage brokers (courtier hypothecaire) earn their salary by the commissions they are paid. Their primary goal is to serve the borrowers and build up a reputation so that their business will grow based on recommendations.
So, you see that even though the lender pays the fees of the broker, it is the borrower the broker works for.
Gregory is an Accredited Mortgage Professional (AMP). To get more information on
mortgage brokers - courtier hypotheque, please visit:
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