If you are going to submit an application for a mortgage, you will feel that you are in a sort of battle with the lender, since you are on two different sides of the issue. The lender wants the highest interest rate so he can make the most money, and you want the lowest interest rate so you can have the lowest mortgage payment. A mortgage broker (courtier hypothecaire) will be a middle man in these negotiations.
Does this mean that the broker works for the lending institution or for the borrower? If you know that the lender pays the broker’s fees, you may come to the conclusion that the broker works for the lending institution, but this is not true.
The mortgage business in Canada is very competitive. Some big mortgage brokers have several billion dollars of home loans every year. Many lending institutions want to work with mortgage brokers (courtier hypothécaire), who can give them additional business.
Brokers (courtier hypotheque) make roughly the same commission, regardless of which lender they work with. This makes brokers fairly independent, as they will get the same fee from any of the lenders. Borrowers are perfectly happy not to be paying this fee.
This is what this kind of competition means:
-Lenders team up brokers to be exposed to more loan business
-A potential borrower’s application can be seen by 50 or more lenders, without any additional burden on the borrower.
The borrower then really becomes the client of the broker (courtier hypothecaire). A broker makes sure to serve his client by finding the most appropriate mortgage strategy and mortgage product for him.
The objective of a good mortgage consultant are :
1) To create clients for life
2) To make them happy enough to refer the broker to friends, family and neighbors
Mortgage consultants (courtier hypothecaire) earn their money 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.
This shows that, even though the lender pays the broker’s fee, it is the borrower that the broker serves and wants to keep satisfied.