When you apply for a mortgage, the two parties in the transaction are somewhat against each other. The borrower wants to get the best (lowest) interest rate possible and the lending institution wants to get the most earnings (highest rate). A mortgage broker (courtier hypothécaire) will step in to assist the home buyer and lending institution to come to terms over the mortgage so it gets done.
Does this mean that the broker works for the lender or for the home buyer? If you know that the lending institution pays the broker’s commission, you will make the assumption that the broker works for the lender, but this is not the case.
The mortgage industry in Canada is extremely competitive. Some large mortgage brokers have several billion dollars worth of home loans each year. A lot of lenders choose to work with mortgage brokers (courtier hypothécaire), who can bring additional business to them.
The lending institutions pay all of the brokers about the same commission. 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 commission, and he does not have to.
This kind of competition makes lenders want to work with brokers to expand their mortgage prospects, and it means that a borrower’s application can be seen by dozens of lenders.
The borrower then really becomes the client of the broker (courtier hypothecaire). A broker makes sure to serve his client by finding the best mortgage strategy and mortgage product for him.
The broker makes his same commission from any of the lenders he works with, so in order to make more money, he will want to expand his client base by
-creating satisfied clients who will come back to him each time they refinance or buy a new home
-creating a network of potential customers who are the friends, relatives and associates of his satisfied customers
If the broker (courtier hypotheque) is making his living by fees, he has to build a strong reputation among borrowers and potential borrowers so that his commissions will continue to grow.
So, you see that even though the lending institution pays the commission of the broker, it is the borrower the broker is working for.
Gregory is an Accredited Mortgage Professional (AMP). To get more information on
mortgage brokers - courtier hypothécaire, please visit:
Hypothèques - Mortgage loanshref="http://www.infohypothecaire.com">Hypothèques - Mortgage loans
