How a Mortgage Broker Can Help You

By Brennan Valenzuela
Ratehub.ca

Buying a house and getting a mortgage can be an overwhelming experience. The process involves hours of research and education before you make the largest financial commitment of your life. Did you know that using a mortgage broker can save you two of your most valuable resources? Time and money.
Reason #1: Mortgage brokers save you time
Finding and comparing mortgage rates is time-consuming. If you were to do it yourself, you'd have to contact each lender, make note of what rates each were offering and the accompanying details, and then compare the results to find the best mortgage product for you. Brokers do the legwork for you. They find and compare rates suited to your needs. A mortgage broker removes the stress of mortgage shopping in the same way that a wedding planner does with his/her clients.

Reason #2: Mortgage brokers understand the details
A mortgage professional is already familiar with the mortgage industry, including what each lender has to offer. They have insight into the mortgage landscape only experience can provide. Most consumers are obsessed with finding the lowest mortgage rate, which is important for reducing monthly payments; however, it is not the only mortgage feature to consider. Mortgage portability and assumability provide options if you decide to sell your home mid-way through your mortgage contract. Without these features, you would be forced to pay a mortgage penalty which can be costly. Prepayment options allow you to pay off your mortgage faster; however, the amount that you are allowed to contribute differs by product and lender. In a closed mortgage, lenders will actually penalize you for accelerating your mortgage repayment beyond your contractual limits. A mortgage broker is able to identify and categorize which mortgage features will be beneficial to you and which lenders offer them.

Reason #3: Mortgage brokers save you money
Consumers who use mortgage brokers pay lower interest rates by an average of 0.175 per cent, compared to those who use banks. To put that into perspective, let's assume you have a $400,000 mortgage with a 25 year amortization. If a bank can offer you a 5-year fixed rate of 3.16 per cent, then a broker will be able to get you a better rate of 2.99 per cent. That translates into an extra $35 in savings each month, which may not sound like a whole lot - but by the end of the 5-year term, you would have saved $3,211 in interest payments!

BROKER VS BANK:

Category	Bank	Broker	Broker Savings
Mortgage rate	3.16%	2.99%	0.17%
Monthly payment	$1,926	$1,891	$35/month
Interest paid after 5 years	$58,500	$55,289	$3,211

*all calculations were made using a mortgage payment calculator


Save the hassle
Mortgage brokers are trained, independent professionals who work to represent you and your best interests. A broker can save you time and money, plus their services are entirely FREE.


Source: http://calumross.com/articles/mortgage-articles/mortgage-brokers-sense/