You’re interested in buying a house — congratulations!
There is so much to consider when buying a new home. Choosing a desirable neighbourhood, qualifying for a mortgage, finding a lawyer for the paperwork and more. The list is quite daunting.
That being said, have you considered using a local mortgage broker to assist you in the home buying process? Our team at Bennett Capital is Waterloo Region’s leading mortgage brokerage, and we are passionate about helping families secure their dream home for the best rates possible.
Local mortgage brokers, like our team, are equipped with ample expertise and knowledge, both about the mortgage industry but also the local landscape. We also offer a tailored service to your needs and the kind of home you’re looking for, ensuring you lock in the best rates and deals possible. Whether you’re buying a home or looking to renew your mortgage, your mortgage broker is a valuable individual to have in your corner comes time to commit.
The expertise and knowledge of local mortgage brokers provide a valuable advantage when navigating the complexities of the local real estate market. Their insights, guidance, and tailored recommendations can help you make well-informed decisions and secure the most suitable mortgage options for your specific circumstances.
In this blog post, we’ll be exploring several key benefits of using a local mortgage broker for your transaction.
Local mortgage brokers possess in-depth knowledge of the local real estate market, including specific regulations, zoning laws, and lending practices. They understand the nuances of the area and can provide valuable insights and guidance tailored to your needs. This is especially important for Waterloo Region, which is constantly changing and growing.
Local mortgage brokers have a deep understanding of the local real estate market dynamics. They stay up-to-date with current market trends, property values, and neighbourhood developments. This knowledge allows them to provide accurate assessments of property values and potential risks or opportunities in the market.
Each locality has its own set of regulations and zoning laws that govern real estate transactions. For example, did you know you could park on the streets in Kitchener, but not in Waterloo? Or that you are allowed to have a controlled fire in your backyard in Kitchener, but not in Waterloo?
Local mortgage brokers are well-versed in these regulations and can guide you through the intricacies of local laws and ordinances. They can help you navigate any specific requirements or restrictions that may impact your mortgage application or property purchase.
Mortgage products and lending practices can vary from region to region. Local mortgage brokers are familiar with the specific requirements and preferences of lenders in their area.
They can help you understand the lending criteria, documentation needs, and underwriting processes of various lenders, ensuring you are well-prepared to meet the specific requirements of local lenders.
This not only saves you lots of time in the already crammed window of time to purchase a home, but it can potentially save you thousands of dollars down the line.
Local mortgage brokers often have in-depth knowledge of specific neighbourhoods and communities within their area. Which neighbourhoods are the most desirable? Which have the best school districts? Which are closest to the highway or have the highest ranking for walkability or nature?
This information can help you make an informed choice when selecting a property and ensure it aligns with your lifestyle and preferences.
The expertise and local knowledge of mortgage brokers enable them to provide tailored guidance that suits your specific needs. They can analyze your financial situation, long-term goals, and preferences to recommend mortgage options that align with your requirements. For example, they can help you find suitable loan programs, identify properties with good resale potential, or suggest financing strategies based on the local market conditions.
Local mortgage brokers are adept at assessing the risks associated with a particular property or transaction. They can identify potential red flags or issues specific to the area, such as environmental concerns, flood zones, or title complications. By highlighting these factors, they help you make informed decisions and mitigate risks associated with your mortgage and property purchase.
Local mortgage brokers offer a significant advantage through their extensive lender network, which includes connections with various banks, credit unions, and alternative lending sources. This network grants them access to a diverse pool of loan products and financing options.
They can connect you with specialized lenders who understand your specific needs, increasing the likelihood of finding suitable loan options tailored to your financial situation. This enables you to explore a wide range of loan products, compare different features and terms, and make an informed decision.
Local mortgage brokers excel at matching borrowers with appropriate loan options. They evaluate your unique financial circumstances, credit history, income, and preferences to identify lenders likely to offer favourable rates and terms. By considering multiple lenders, brokers can present you with several loan options that align with your requirements, empowering you to choose the most suitable one.
They also leverage their relationships with lenders to negotiate competitive rates, favourable terms, and reduced closing costs on your behalf. This simplifies the loan shopping process by streamlining communication and saving you time and effort.
Lastly, local mortgage brokers act as your advocate throughout the loan application process, handling interactions with lenders, submitting documentation, and negotiating terms, ultimately increasing the likelihood of a successful loan approval.
Working with a local mortgage broker saves you time and effort by streamlining the mortgage process. Instead of approaching multiple lenders individually, a local mortgage broker can streamline the process by evaluating your options and presenting you with the most suitable offers. This saves you time and effort in researching and negotiating with lenders.
They evaluate your financial situation, creditworthiness, and needs, and present you with the most suitable loan options. With access to multiple lenders, they do the research and negotiation on your behalf, ensuring you receive competitive rates and terms.
In short, they act as your representative, handling the complexities of the mortgage application process. At Bennett Capital, we make it our personal mission to simplify the process, provide customers with personalized guidance, and saves them valuable time and effort in researching and negotiating with lenders. This way, they can focus on what matters to them and we will handle the paperwork.
Local mortgage brokers typically provide ongoing support throughout the mortgage process, from application to closing, and beyond. They can assist with paperwork, coordinate with other parties involved (such as real estate agents and appraisers), and address any issues that may arise, ensuring a smoother transaction.
Come renewal time, they are the ones to guide you through the process again, ensuring you lock in favourable interest rates and good terms. The main focus of the mortgage broker is to ensure that the customer is receiving the fairest deal possible and maintaining a strong relationship along the way.
Local mortgage brokers prioritize customer satisfaction and building long-term relationships within the community. In a tight-knit community such as Waterloo Region, where you can run into your lawyer at the grocery store and your dentist at your favourite restaurant, healthy relationships are the backbone of every interaction. They also help make our community a positive and fantastic place to live and raise a family.
Mortgage brokers have established connections and rely on referrals and positive feedback, ensuring customers can trust their expertise. This allows them to grow their roster of customers and in turn, help individuals find the right home for them.
We hope to have convinced you that using a local mortgage broker for your home buying process offers numerous benefits and peace of mind.
Local mortgage brokers, like our team at Bennett Capital, possess expertise and knowledge about the mortgage industry and the local landscape. They understand the local real estate market, regulations, and zoning laws, saving you time and effort in researching and navigating these complexities.
With an extensive lender network, they can connect you with specialized lenders, ensuring you have access to a wide range of loan products and financing options. Their tailored guidance and risk assessment help you make informed decisions and mitigate potential risks.
Our team of mortgage brokers provide ongoing support and value long-term relationships, guiding you through the mortgage process and renewal periods. By prioritizing customer satisfaction and reputation, we care to build trust and maintain strong connections within the community.
Choosing a local mortgage broker ensures personalized service, competitive rates, and a smoother home buying experience. Reach out to us and let’s begin the process of finding the right home and the right rates for you and your family.
The bank is one of the most obvious first stops for most people looking for a mortgage. Your day-to-day banking institution may also entice you with incentives to open a mortgage portfolio. Going to your bank also saves you from going from one lender to another.
But we all want the best deal out there, right? For that, you’d have to go from one bank to another looking for the best rate.
Sure, you’re a very organized person and can likely create a spreadsheet to take on that task. But who wants that headache? Who has the time to go from one bank to another? And who has the time to understand the intricacies of the different packages each bank offers? How do you even know you’re getting the best deal?
The mortgage world has many hidden twists and turns that can throw hurdles your way. The process is complicated enough for those that already own properties, let alone for first-time borrowers.
But before you give up on applying for a loan, there’s hope in the form of using a mortgage broker.
Mortgage brokers are the bridge between borrowers and lenders. They’re licensed and qualified professionals that put a lot of time into becoming experts in the world of mortgages, especially those that have years of experience. Their skills make it simple and easy for borrowers to find the pot of gold at the end of the mortgage rainbow.
Brokers have access to a large variety of lenders, from banks to non-traditional financial institutions and creditors. Years of experience dealing with lenders give brokers insider access to great rates. They’re your personal loan shoppers, dedicated to finding you the best option. They’re trained and have years of experience to easily take care of all the paperwork and legwork for you.
Brokers don’t hesitate from taking on clients that banks may turn down, because they don’t work for a dedicated lender. Brokers will create a borrower profile, which they will use to match you with the best lender as they have about 57 lenders to choose from.
Brokers don’t just come onto the scene when you’re in the market to buy a home. They will be there through all the stages of property ownership, from getting pre-approved to getting a mortgage to renewing it or to purchasing a second home or investment property. Not only that, but brokers will also help assess and set up goals that will take you closer to getting the mortgage needed for your dream house.
And the best thing is that mortgage brokers will not hesitate to answer any of your questions — so ask away.
Let’s handle this one right at the beginning, shall we?
Mortgage brokers work on commission, so lenders cover their fees. Hence, borrowers (that’s you) usually don’t pay anything. However, depending on your case, you could be required to pay some money for credit or income issues but that is always disclosed upfront.
Other mortgage-related fees you will have to pay include appraisal fees, land transfer taxes, lawyer fees, and title registration fees.
But only in rare cases will you have to pay your broker a fee for their work, they will always discuss the reasons and scenarios before approval so that you are aware.
With that out of the way, let’s focus on what the actual process entails.
The broker’s task begins way before you’ve even started looking at properties. They will help you pre-qualify for an amount that will guide your search.
Once you’re ready to start property hunting, you can go ahead and give the green light to your mortgage broker to start the approval process. Completing paperwork and getting the final go-ahead from a lender can take a few weeks.
But the broker’s role doesn’t just end there. Once you’ve identified a property, your real estate agent and the broker will work together to put in a bid and help you close the deal.
Not all lenders are equal and neither are all interest rates.
Asking about the best interest rate for you is a good starting point because you may not qualify for what is advertised on a bank’s website. The interest rate you receive from a lender could depend on factors, such as your credit score, your current debts, income level, loan repayment history, and loan term. Further factors that play into the process are the types of lenders your broker has access to, also the amount of your downpayment can determine the rates as well.
Using all your financial information, brokers help you pre-qualify for an interest rate. That’s a conditional rate that can be solidified once you decide to go ahead.
It’s important to know how much money you’ll have to arrange upfront. You could be required to give as little as 5% and as much as 20% of your total mortgage as a down payment. But a general misconception is that the larger the down payment, the better your mortgage rate. The amount of money you can provide at the outset does affect your interest rate, but the rate is related to risk, so with insured the risk is low as well as with more funds down where there is equity in the property.
There are two types of mortgages available in the Canadian market: a fixed rate and a variable rate.
Your broker can explain the ins and outs of both.
A fixed-rate mortgage may make the most sense for first-time homebuyers because it means your monthly payments will remain the same. It’s better for budgeting. Also, with variable rates, the Bank of Canada has been making many rate adjustments due to its mandate to curb inflation.
In the second instance, your rate could go up and down at any time during your mortgage term. This type of rate is a bit tricky to budget for because it’s affected by the l Bank of Canada rate changes.
Lenders are laser-focused on making their money back. Borrowers need to demonstrate their ability to pay off the loan. You can do this by showing a steady and increasing rate of income year over year. Don’t worry if you are paying off existing debt. The key here is to make sure you’re paying it off. But if you’re loan-free, it’s even better.
Don’t let this one bite you in the behind. If you’ve saved enough thinking you can pay off your mortgage before the term end — you may want to cool your horses a bit. Some lenders charge a penalty fee for early prepayment. They do this because they’re expecting to make a certain amount off your mortgage. Early payments throw a wrench in their plans. Ask your Mortgage Broker if it’s beneficial to pay off your mortgage earlier.
Sit down with your mortgage broker to get a clearer understanding of this. It is especially crucial if you’re under a strict timeline to move out of your existing dwelling. It’s always a good idea to have a detailed discussion with your broker to plan for unforeseen delays.
Even though you may not be paying your broker any fees for their work, you will be required to pay fees when the deal closes. Talk to your broker about a cashback mortgage option. You can use the money toward closing fees, which will include lawyer’s costs, utilities, home insurance, repairs, and maintenance.
Pay special attention to this one. Discuss any limitations in the terms of the mortgage before you sign anything. This is possibly one of the toughest conversations you will have with your broker. But they can advise you about a workaround so you’re not limited by the mortgage terms that may prevent you from refinancing or switching during a term.
A mortgage is a huge commitment for anyone to undertake, so do your homework. Whether you’re applying for a mortgage on your own, have a partner, or have co-signers, make sure to list all your questions right at the beginning.
Misunderstandings have no place where important financial transactions are concerned, so go into the meeting prepared with queries and ask follow-up questions. And never hesitate to send more via email.
Make it a friendly conversation so no one is ticked off. However, professional mortgage brokers expect to be “interrogated” and never feel offended. In fact, they welcome the opportunity to give you a better understanding of their role and the process. We love to answer questions, it is full transparency!
Call us to review your financing requirements, we are here to review your requirements and provide solutions!
As property values cool down, the market is turning in favor of buyers. But how do you get approved for a mortgage?
In North America, property is mostly bought on credit, which is called a mortgage. Banks, lending companies, or agencies provide this money to buyers with the help of mortgage brokers.
If you’ve ever bought a property or have used the services of a mortgage broker, you may have noticed they didn’t invoice you.
But then how do mortgage brokers get paid?
Well, let’s find out!
Mortgage brokers are qualified real estate professionals that work behind the scenes with a variety of lenders to provide you with the best mortgage interest rate. Banks, which are also lenders, are accessible through a mortgage agent who has more experience than a clerk at a branch. But mortgage brokers are not limited to one financial institution. They can access several creditors for a mortgage.
When a broker takes you on as a client, they will gather your financial information and bring you the best available options for your needs.
This saves you the hassle of going from one lender to another. It also takes dealing with a bunch of complicated paperwork and numbers off your plate or booking to speak to a banker who may not have the authority to give you advice on issues or how to get approved on your scenario.
Not only do brokers take on those duties, but they also do all the work for the lender. In return, they get great deals and discounts that can work out well for you — and for them. They have automated processes to allow you to upload documents to a client portal to ensure a smooth review of documents for approval.
Brokers can also provide great options for newcomers to Canada because they can help negotiate a loan by helping the lender look past the lack of credit history. They also have the magic beans for those that suffer from poor credit. Mortgage brokers can also help those that have high debt and are considered risky borrowers. And another category of borrowers that benefits from brokers is self-employed people who may not qualify with big banks.
So how do mortgage brokers make money?
One word: commission but the lenders pay based on having a client for a term.
And just like any other commission-based job, the more deals brokers close the more they get paid. And of course, lenders incentivize brokers to find the best borrowers that can service a loan. They get better rates based on this volume and pass it along to their clients. Using an experienced agent who has this access is key.
But professional brokers won’t let the pressure of their commission get in the way of finding the best deal for you. They also must protect their reputation, which is directly related to how many deals they will get from lenders. Go with an agent that shows they have experience and tenure.
Brokers also rely on referrals from previous clients so they can get more business. And they want to make sure they provide high-quality services, so the same client comes back when it’s time for mortgage renewal.
The most common way mortgage brokers get paid is through what’s called a finder’s fee, which is determined by the lender. As with all commission-based payments, brokers are paid after the deal has gone through. This means it’s in their best interest to keep their client happy, so the process goes smoothly.
The amount of a finder’s fee could range depending on your term and based on your mortgage amount. However, the exact percentage the broker makes will also depend on the type of chosen mortgage and the length of your mortgage term.
Now what’s this all about?
A mortgage broker is affiliated with a licensed brokerage that allows them to use its name and its reputation. The split fee is the percentage the brokerage shaves off the commission as a licensing fee.
This amount can depend on the experience of the broker. The more experienced the broker, the less the split.
Finding a mortgage is hard work. Brokers must go from one lender to another and prepare a winning case for you. This takes time, great negotiation skills, experience in the industry, and connections that the broker can leverage for the best results.
To make the task worth their time, brokers will rank their clients by their level of debt serviceability. Some clients are marked as “prime clients,” who have the income and habits to consistently pay off a debt. These are the types of clients all brokers and lenders prefer to offer competitive rates.
However, if your case falls below the prime client level, be prepared to pay your broker a percentage fee as they are usually deals that require a lender fee and do not pay a broker much commission.
But don’t worry, none of this will come out of the blue. Mortgage brokers, by law, are required to disclose borrower fees upfront. If there is an issue qualifying on income or credit, you will hear about it early. If you end up having to pay, you can decide on a percentage and add it to a contract.
Speaking of which, when your mortgage is up for renewal, it’s a good idea to go back to the same broker that helped you initially. Give them a heads-up 4 months before the renewal date so they can start their search.
They already know your case. They have the paperwork from the initial file. They can access your record and build a case with the same lender for a better deal. Or they can present you as a prime client to another lender that may offer a lower rate.
If you decide to switch, your broker will still get paid, but it’ll be a new one-time commission or negotiated trailer fee. In most cases, our goal is to improve on the renewal offer issued by the existing lender
It’s always a good idea to have the “fee” discussion with your broker upfront. They’re obligated to disclose any fees to you.
It’s fair compensation for work that goes into the whole process.
The broker puts massive effort into fine-tuning a deal. The complicated numbers and paperwork they bury themselves in are specialized and hard work. The number of hours and behind-the-scenes prep that goes into a mortgage never come to light because professional and seasoned mortgage brokers take good care of their clients.
And this is just the lighter side of things. If your case is complicated, even more work goes into it.
Lenders determine how much of a special discount they can provide brokers by assessing them for their efficiency and consistency with clients. Cancellations will not only affect broker ratings but future referrals and the special deals they can secure for their clients.
If brokers fall way below the cutoff point set by a lender, they may risk losing their standing with a lender altogether.
Whichever one it is, read the fine print carefully and have an open discussion with your broker about this before you sign any papers.
You have to remember that mortgage brokers are part of your real estate team. They’re working for you to find the best deal in town so you can become a proud homeowner
Buying a house may be one of the biggest financial purchases you ever make. When it comes to making big purchases there is a tendency to take a little more time and learn a little more about the process. For example, you will spend a lot more time choosing which car to buy than what brand of peanut butter to purchase.
Large financial decisions are complicated and can contain many variables. When you’re purchasing a home it’s very easy to get fixated on all the finishing touches like countertops and on-suite spas. While you are deciding on which wall, you’re going to knock down to make your private bathroom, you should also be looking at the financial side of this big spend.
A house purchase can potentially last a long time. Impulsively buying a house today, could be a financial regret for the rest of your life.
For example, this could be anything from purchasing a home without an inspection and then being saddled with massive contractor bills for repairs or picking the wrong mortgage product and finding out you could have saved tens of thousands of dollars over the lifetime of the purchase by shopping around.
You don’t want to have to associate the place you live in every day with a big financial mistake.
Buying a home is a different kind of financial purchase than other large purchases you might make. There are a lot of emotional components to buying your home. It can be very difficult to separate the two and make a strong financial decision instead of a feel-good decision.
Everyone wants to get a good deal, but when it comes to houses that seems to go right out the proverbial window. A house can quickly become something you want and what you need doesn’t matter.
Let’s take a quick look at how much space we think we need.
The average family home in the 50s-70s was less than 1000 square feet in size. That small home would normally have five to eight people living in it as well. Nowadays, the average family member can have 1000 square feet just to themselves.
Obviously, we don’t need that much space per person. And now the trend is for people to complain that they haven’t seen their kids most of the day because the house is too big.
Focusing only on your wants and desires can be a real recipe for financial disaster. If you don’t plan your purchase correctly, you could easily end up house-poor. That’s where you have a big, beautiful home, but after making your payments, you don’t have enough money to enjoy life.
Shelling out thousands of dollars for fancy finishes can really come back to bite you when you realize that over the lifetime of a mortgage, you pay back 2-3 times the initial cost. So that $60,000 kitchen cost ends up costing you $120,000 by the time you’ve paid off your mortgage.
If you want to make the best financial decision possible, speak with your financial adviser or mortgage broker. Either way, it really helps to have a list in advance of what your needs are versus your wants. Make sure you make note of any features you absolutely must have. If you have 3 kids and a spouse, no one is going to blame you for wanting more than one bathroom!
To help us make these huge financial decisions, we can enlist the help of experts. Each expert has their own field of expertise:
A Realtor is your buying agent and can help you find a house that suits your initial checklist.
A home inspector is a professional with contracting experience who can assess if the house you want to purchase is safe and might require massive repairs.
A real estate lawyer is going to make sure your house property title and land surveys are all above board.
A mortgage broker is going to help you negotiate with different lenders to get the financial aspects of the house purchase sorted out.
For most homebuyers, especially buyers who already have a mortgage on their current home, the first place they think of for financing is their current bank. There are other options available, and some can only be accessed through a licensed mortgage broker.
Banks are limited in offering only their own rates, and only their own products. Your bank advisor is paid commissions on selling the bank's products. Mortgage brokers work on your behalf and can negotiate with multiple lenders to get you the best product and/or the best rates.
Mortgage brokers are regulated and have a fiduciary duty to obtain the best mortgage for you. It’s a requirement of their profession and they can lose their license if they don’t put their client’s needs first.
In most cases, the mortgage broker receives their fee from the financial institution that you choose to finance your purchase. Since most lenders offer similar compensation, the mortgage broker has no incentive to push one product or bank over another.
In fact, if a mortgage broker recommends a particular financial institution, it’s usually because they are easy to work with and offer a robust product that will make you very happy. Mortgage brokers get a large portion of their clients from referrals, and it doesn’t make very good business sense to anger their existing clients.
Your mortgage broker can offer you any product from the entire mortgage market. They are not limited to working with any specific institution, and depending on your needs, they can even access monoline lenders.
A monoline lender is a financial institution that only does mortgages. You can’t walk in a get a chequing account, they only finance mortgages. Mortgage brokers have access to these lenders.
Mortgage brokers often have access to rates below those that are publicly posted in the major banks. Because they act as representatives for a large group of clients, brokers can get special rates.
A mortgage broker, like those at Mortgage Architects Bennett Capital Group, has a working knowledge of all the different mortgage products available. Not all mortgages are created equal and knowing the difference between a standard mortgage or a collateral mortgage could save you tens of thousands of dollars.
There are so many aspects to consider when it comes to a mortgage:
Fixed vs. Variable rates
Collateral vs. Standard mortgages
Primary, secondary, and even tertiary mortgages
Your mortgage broker will be able to sit down and explain all the available options. There are so many different options when it comes to mortgage products that there are people, like the mortgage professionals at Bennett Capital, who specialize in nothing but mortgage products.
It’s hard to imagine finding a bank representative who is an expert in all mortgage products, RRSPs, investment portfolios, TFSAs, and more.
Your broker will do all the work for you by contacting multiple financial lenders to get you the best deal. You won’t need to spend endless hours online staring at rates or trying to understand the fine print of different offers.
As we mentioned earlier, brokers get access to loans on a wholesale basis and that usually means a lower rate or better terms for you. A mortgage broker can also refer you to other professionals like property appraisers, home inspectors, or real estate lawyers if needed.
We hope we’ve made it clear why you might want to work with a mortgage broker over your bank’s mortgage specialist. There are a lot of benefits, with very few disadvantages. One of the reasons people like their bank’s specialists is because they are familiar with them and their surroundings.
Most mortgage brokers work hard to establish a long-term relationship with you. They want to get to know you and just as importantly, help you over the long term. Once you work with a mortgage broker, there’s a very high probability you will keep going back to them for any future home purchases.
If you’re looking for an easy way to shop for a mortgage and you want someone to save you time and money. And you also want that person to establish a long-term relationship with you and become a trusted advisor. And you want that person to have a fiduciary responsibility to help you get the best possible deal.
Looks like you’re looking for a mortgage broker just like the ones at Mortgage Architects Bennett Capital Group.
Call us to get started on your financing today!