Mortgage Brokers

[Zonny]

I'm not sure if anyone on the board has any expertise in this area, but we've used one twice now, and have had great success! Maybe someone else knows of the downside of using a mortgage broker, if there is one?

My understanding is that the broker uses your financial information to 'shop' your mortgage around to banks and other lending institutions to get the best rate. Ours was very knowledgable about the different types of mortgages out there, and we didn't feel stupid at all asking all the questions we needed to ask.

The first time we went with a fixed rate mortgage for five years. This was our first time with a mortgage, and we didn't feel comfortable having a variable rate that would go up and down. The rate we got from using the mortgage broker was significantly lower than the bank that we've done business with for many years, they couldn't (or wouldn't) match it.

When we renewed last year, we went with a variable rate mortgage instead, and again, our 'home' bank couldn't touch it. Our rate is linked to prime rate, which was quite low for the past year. For awhile there, our rate was .75%!

Z

[kduever]

I would definately choose an independent mortgage broker over a bank. We know a great one here in London ON, if anyone is looking for a referral.

[Sunraven]

We're actually coming up for renewal... and I want to get in before rates hike again... they are saying it's expected to raise the second half of this year... Zonny can you PM me your broker's details?

[Zonny]

We're actually coming up for renewal... and I want to get in before rates hike again... they are saying it's expected to raise the second half of this year... Zonny can you PM me your broker's details?

My broker is in Nova Scotia, so probably not very helpful for you. Her name is Holly Robinson though, if any NS folks are interested. PM me if you do use her, she recently sent me a GC for referring a client to her! :D

Z

[Sunnyg]

I agree! DH was just starting his own business and didn't have the required X number of years of tax returns for the bank we had banked with our entire lives when we went to get our first mortgage. We went to a broker (in London as well) and he was fabulous! We got a rate that didn't come close to the ones at the bank, and ironically, it was a subsidiary of the same bank that wouldn't even look at us the first time without proof of DH's income.

We've always gone back to him and have been happy every single time. I'd highly recommend a broker! (and you are right Zonny, we asked tons of questions and he never made us feel stupid and just answered everything until we were satisfied!)

[Eeyah]

Prime example of why brokers are better:
My boss just bought a property (like yesterday!) and he was at the bank (CIBC) today and so he asked what the variable rate (on a 5 year) was and they told him 4.67 (or something in that area). Anyway he gets back to the office and calls our broker (really good client of our business, also my broker) and she can get him in at 2.04% on a fixed variable for 5 years!!! I'd say a 3% difference is well worth it!

I totally recommend going with a broker, let them shop you around! They do all the work for you! Just make sure you spend the time and pick a GOOD broker, one that will spend the time needed with you, answer all your questions etc.

[AmberLab]

I really liked our broker! Plus he is a friend of ours, so that was a huge bonus. He really simplified the whole process for us and saved us money. I can't say enough good things about going to a broker instead. Go to a bank directly? Never!

[miztia]

Thanks for the info. My mortgage is up I think in Sept, but I had heard rates would be going up by fall and was hoping to renew before then. How would you go about finding a "good" broker, and how do they get paid? Sorry.. a bit clueless here LOL, ive always just dealt with the bank.

[Zonny]

Thanks for the info. My mortgage is up I think in Sept, but I had heard rates would be going up by fall and was hoping to renew before then. How would you go about finding a "good" broker, and how do they get paid? Sorry.. a bit clueless here LOL, ive always just dealt with the bank.

I believe that they make their money in commissions from the banks they deal with. Bringing them business gets them something.

There's speculation that prime rate will probably go up over the summer (it can't really go down any more!), so you're probably right to want to get in sooner rather than later. I'm pretty sure there are rules about how far before your mortgage is actually due that you can renew.

Talk to coworkers, anybody you know who owns a home, see if they know anyone. Our broker was recommended by our lawyer who did the paperwork on our home purchase. Realtors would probably know some good ones too.

Z

[miztia]

thanks. I'll start asking around. I would love to be able to up the payments with a better interest rate as I have 7yrs left on the mortgage but could try to get it done in 5.

[ashedfc]

Interest rates has nowhere to go but up.
Australia has already raised interest rates 4 times since Oct 2009.
As the economy does well & more jobs get created, interest rates will go up.
We are expecting, the first move upwards in July 2010. But there is nothing to panic.
Worldwide all Central Banks have borrowed so much money- they will be forced to keep rates low for a very long time.

Variable is still being preferred, it gives lower monthly payment (easy affotrdability).
I would suggest:- If your income is fixed (with no chance of raise or promotion), then go with a fixed rate mortgage & If your income is variable (business, or there is a risk of getting unemployed) then go with a variable.

[Zonny]

Interest rates has nowhere to go but up.
Australia has already raised interest rates 4 times since Oct 2009.
As the economy does well & more jobs get created, interest rates will go up.
We are expecting, the first move upwards in July 2010. But there is nothing to panic.
Worldwide all Central Banks have borrowed so much money- they will be forced to keep rates low for a very long time.

Variable is still being preferred, it gives lower monthly payment (easy affotrdability).
I would suggest:- If your income is fixed (with no chance of raise or promotion), then go with a fixed rate mortgage & If your income is variable (business, or there is a risk of getting unemployed) then go with a variable.

With our variable rate mortgage, our payment is what we want it to be - well, the low end can only go so low. But since we can afford it at the moment, we pay more than we actually have to, to get rid of the mortgage faster. For us, what was originally a 25 year mortgage will be paid off in about 17 based on my rate today (which I know will go up, but it's still going to be gone before 25 years).

Another thing you can do that will shave a few years off your mortgage, make your mortgage payment every two weeks instead of every month.

Z

[sumi]

thank you guys for the info...
ours is also coming up for renewal in the coming months and we always went with the bank!! maybe this time we'll try a broker!

[Bumper]

I definately like the mortgage broker route. When I renewed last year, I really liked the terms of INGs mortgages and my broker was able to get me a mortgage with them at a rate below their posted rate. Much more stress free experience too.

[ashedfc]

I definately like the mortgage broker route. When I renewed last year, I really liked the terms of INGs mortgages and my broker was able to get me a mortgage with them at a rate below their posted rate. Much more stress free experience too.

Posted Rates are always higher - they are meant for people with bad credit.
Getting lesser than a posted rate is NO Big Deal. Everybody with a reasonable credit can get that.
Its the features in your mortgage which makes it good or bad. Like
1. Can you skip a payment. (What if there is a job loss, or serious illness, or there is no income- for whatever reason).
2. Can you pay extra without any penalty. (IF you have surplus cash, why not pay extra & bring down your mortgage outstanding balance)
3. Will the interest rate really reflect the economy (Normal Mortgage duration - 25yrs to 35yrs, there will be 4 or more recessions). Its a part of economic cycle. Boom-Bust-Boom-Bust - this is the real economy.
4. Prepare for the worst, & hope for the best.
www.edfc.ca