As a homebuyer, you might have a lot of questions about how mortgages work. How can you find the mortgages that are right for you, and what do you need to know to make informed decisions when you contact mortgage brokers? This review of prominent mortgage brokerage firms in Canada includes brokerage descriptions and general information about how to find and work with a mortgage broker.
What Is a Mortgage Broker?
A mortgage broker is a representative who deals with mortgage companies on your behalf to find rates, evaluate mortgage providers, and assist you with the mortgage process. A mortgage broker acts as an intermediary between the homebuyer and mortgage companies in order to find the best rates for homebuyers and the best applicants for mortgage companies. The homebuyer does not typically pay the broker because mortgage companies pay brokers to make their products available to homebuyers.
A mortgage agent and mortgage broker perform similar roles, but mortgage brokers undergo additional licensing requirements, and they must have experience in the field.
The Mortgage Application Process
Typically, the mortgage process starts with identifying potential mortgage companies, obtaining rate quotes, and learning more about the companies. This process can start while you are house-hunting or preparing to house-hunt.
During this stage, it is useful to use a mortgage calculator to find out what your mortgage payment is likely to be, based on your down payment and the interest rates. Investigate fixed-rate loans, adjustable-rate loans, and other home lending vehicles.
A homeowner generally gets pre-approval for a mortgage. While a pre-approval letter does not always guarantee a mortgage, it reassures the home seller that the mortgage will go through once you submit the mortgage application.
Once you make an offer on a home and the seller accepts the offer, your mortgage paperwork goes to the mortgage company for approval before you can close on the house and take possession. It is important to note that mortgage paperwork is really more of an application package. It takes time to generate all of the correct paperwork and needs careful attention. For this reason, we have created an article specifically explaining the process of gathering documents for your mortgage application. During this stage, the mortgage company will verify the details of the principal amount, interest rate, and amortization period.
The Top 7 Mortgage Brokers in Canada
We considered many factors in choosing mortgage brokers for our top picks, including:
- The reputation of the mortgage brokerage firm
- Informational and educational resources
- The breadth of mortgage brokerage services
- Other benefits and distinguishing features
Homewise strikes a balance between accessibility and affordability. The company's website offers a Mortgage Academy and First Time Homebuyer's Zone to help buyers understand the mortgage process and what Homewise does as a mortgage broker.
The Homewise team is tech savvy and understands the real estate market in Canada. Prospective homebuyers have the tools they need to create a personal profile and use that information to match with potential mortgage companies. Once a homebuyer is ready to pick a broker, Homewise guides them through the process. ***Homewise is also a heavy hitter in the partnership business, offering their technology to qualified businesses to provide the ease of online mortgage comparison to Canadians nationwide.
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Canadian Mortgages Inc. (CMI)
CMI is an established mortgage brokerage that works with an extensive network of mortgage companies and offers a wide range of mortgage brokerage services. Based in Toronto, CMI serves a diverse community and helps immigrants, first-time homebuyers, and homebuyers with less-than-ideal credit scores obtain mortgages. CMI was a finalist for the 2019 Canadian Mortgage Awards.
CMI offers free consultations and serves Ontario, Manitoba, Alberta, and British Columbia, so it is a strong choice for homebuyers who need expert advice and guidance during the search for a mortgage and the mortgage application process.
Part of Nesto's brand is its status as the "first digital mortgage brokerage." The company started in 2018, giving it years of experience with online mortgage technology. The website offers a helpful frequently-asked-questions page. Nesto actually allows you to secure your mortgage rate for 150 days which is the longest hold of any other lender.
Although Nesto is an early entrant in the digital mortgage marketplace, other brokerages have been around longer as brick-and-mortar brokerages. That might be a consideration if you want to work with a more established brokerage.
Questmortgage emerged from the popular investment brokerage Questrade and is one of the leading mortgage brokers in Canada. Its main selling point is its BetterRateTM rates, which can be lower than the rates you would get on your own from a bank or credit union.
Like Homewise, Questmortgage offers an array of resources for buyers, including mortgage calculators and information about Canadian loan programs. Its process is simple: buyers submit an application to Questmortgage, choose from the rates that Questmortgage offers and then submit an application to the mortgage broker.
Rakehub's key advantages are its strong reputation in the field, its award-winning status, and its 12-year track record. Ratehub offers brokerage services for mortgages, auto loans, and investments.
Ratehub has an expansive selection of resources, including calculators and educational content for prospective homebuyers. As with other brokerages reviewed here, mortgage companies pay Ratehub to advertise to buyers and for loan approvals and applications mediated through the brokerage.
True North started as a physical brokerage in Calgary, but the firm now offers an online service. One advantage of True North is that the mortgage companies pay True North to list their rates, so you don't have to worry about fees.
True North brokers do receive a commission, however, so that could incentivize them to make quick sales rather than give you time to find the mortgage broker that works best for you.
Verico, The Mortgage Leaders
Headquartered in Toronto, Verico is a network of mortgage brokers that finds mortgage rates and solves problems for clients. Verico offers brokerage services for second mortgages and non-bank alternative mortgages.
Should You Go to a Mortgage Broker or Contact a Bank or Credit Union Directly?
Homeowners can apply to banks or credit unions directly or go through a mortgage broker. But which option is better?
Advantages of Using a Mortgage Broker
The main advantage of using a mortgage broker is the convenience of having someone walk you through the process.
Easily compare rates: Working with a mortgage broker allows you to compare rates from multiple companies more easily than contacting each company independently.
Use their years of experience: A mortgage broker with years of experience knows what questions to ask each mortgage provider. They have expertise with different types of mortgages and know about mortgage options that worked well for homeowners like you in the past.
Find the right mortgage for you: Some homeowners discover they could have saved money on their mortgage by choosing a different provider or structuring their mortgage differently. A mortgage broker can help you avoid buyer's remorse.
Get help with paperwork: A mortgage broker helps you deal with paperwork that might otherwise be overwhelming. Mortgage brokers know what documentation and forms they need at each stage of the process, and they can help you prepare. Without a mortgage broker, you run the risk of delaying your mortgage or having your mortgage fall through because you missed a crucial detail.
Get better rates: Mortgage companies want to avoid losing business to competitors, so being on good terms with mortgage brokerages benefits them. It might make business sense for them to offer a lower rate to a broker if that broker brings them more applicants in the future.
Rely on strong relationships with mortgage providers: Some brokers are selective in the buyers they take on as clients. If a broker has a reputation for only representing clients with good credit, mortgage providers might feel more comfortable offering a mortgage on more attractive terms.
Get the best offer: Mortgage companies encourage comparison shopping. Researching and applying for mortgage pre-approval can be a time-consuming process, which a broker handles for you. A broker makes sure you don't accept an offer unless it's the best choice.
Advantages of Contacting Mortgage Companies Directly
Prospective homebuyers who are very knowledgeable about the mortgage lending business could cut out the intermediary and work directly with mortgage companies.
Save time: Working directly with the mortgage provider could save time by skipping the process of picking a mortgage broker and consulting with them.
Work with your preferred provider: You might opt not to work with a mortgage broker if you already have a personal connection with a mortgage provider. If your family has done business with a particular bank for years, you could leverage that connection to get favourable mortgage terms.
Act in your own best interest: Some homebuyers worry that if they work with a mortgage broker, the broker might be more interested in earning a quick commission or drumming up business for the mortgage companies rather than advocating for their clients. If you are worried about your broker working in your best interest, consider one of the brokerage firms that do not pay commissions.
Tips for Contacting a Canadian Mortgage Broker
Once you've found a few companies that offer affordable rates, follow these tips to reach out to each company and get more information before making your decision.
Look for Help from the Canadian Government
The federal government of Canada has information on its website to help homebuyers understand the mortgage process and find mortgage assistance, including:
- Mortgage-related terminology
- Tips on preparing to get a mortgage
- Your legal rights as a borrower
- Mortgage insurance
- And more
Your province also has information about mortgage lending. Search for information about qualifying for low-interest mortgages or other types of mortgage assistance.
Once you decide that you are ready to look for a mortgage broker, plan on doing some homework so you know what to expect and have the information you need at your fingertips.
Search Online for a Mortgage Broker Near You
Before you narrow down a shortlist of mortgage brokers to contact or contact banks directly, investigate leading mortgage brokers and lending institutions online to learn more about the mortgage products and brokerage services available in your area. Even if you do not decide to work with a particular brokerage, the resources on their site might help your decision-making process.
Get Referrals from People and Organizations You Trust
If you know people in your neighbourhood that have home mortgages, ask them how they chose their mortgage broker and whether they are satisfied. If they had any problems finding a broker or encountered any problems during the application process, ask them to describe what happened.
Talking with someone who has a longstanding relationship with a mortgage company, including refinancing, home equity loans, and other changes to the mortgage agreement, is a good way to find out about your potential experience.
The business relationship between homebuyers and mortgage brokers can last for decades, so your search for the right broker should consider more than just the application and approval process.
Investigate What Kinds of Mortgages the Broker Specializes in
Some mortgage brokers have reputations for focusing on particular segments of the market.
For example, one broker might be particularly effective at helping homebuyers with not-so-good credit find a mortgage, while others might be selective in the clients they take on but provide better rates. Others might be particularly knowledgeable about government programs and other sources of mortgage assistance.
During your first consultation with a mortgage broker, get a sense of their strengths and limitations. Ask yourself if they are a good fit for your particular circumstances.
Get a Feel for the Broker's Customer Service
When you call a broker or request a quote online, are the representatives responsive and personal? Do they treat you with respect? Are they brusque or rushed?
If a broker is hard to deal with when they are trying to gain your business, they might be equally difficult if there is a problem with your mortgage or you need their help with time-sensitive information. Develop a good rapport with their customer service before you enter a business relationship with them.
Make Sure You Understand Each Other
A professional mortgage broker should ask questions about your needs before jumping into a sales pitch or making promises. A mortgage broker is acting as your representative to lending institutions. Before they speak with banks or anyone else on your behalf, they should know:
- What sort of property you are looking to buy
- Whether or not you have good credit
- How much money you have available for a down payment
- How much of a monthly payment you can afford
- Any concerns you have about the mortgage process
Your mortgage broker should also be able to help you navigate the often complex world of mortgage lending. They should describe the process and their recommendations to you in terms you understand. If you have questions, they should be able to answer them in plain language.
If a mortgage broker uses terminology you do not understand, ask them to explain the words and use examples to illustrate what they mean. If the broker seems frustrated or unwilling to elaborate, they might not understand the terms fully or be able to express themselves in plain language. Either way, they might not be the right broker for you.
Questions to Ask a Mortgage Broker
When you contact a mortgage broker, keep the following questions in mind and take note of their answers. If anything they say does not make sense or they leave out important details, do not be afraid to ask follow-up questions.
Have You Been in Business for a Long Time?
A new company or a mortgage broker that is just starting out could do a creditable job. However, you should look for evidence of experience and expertise if the company does not have a long track record.
What Fees Do You Charge, and How Do You Determine Those Fees?
Mortgage brokers should always be upfront about their pricing and any circumstances, such as your credit rating, that might affect their fees. If mortgage companies pay the brokerage, how do they ensure that you get unbiased information about your options?
How Does the Mortgage Application Process Work?
Although you should be familiar with the elements of the mortgage application process from reading this blog post, we recommend asking the broker to walk you through the process. Having them guide you through the process gives you a sense of:
- How articulately your broker can explain complicated topics
- Whether the broker is knowledgeable and has up-to-date information
- If any special circumstances apply to your situation
What Should I Do If I Need to Contact the Mortgage Company in an Emergency?
A mortgage company that is dedicated to its customers should provide you with a phone number, an app, or an e-mail address and an estimate of their response times.
Continue your mortgage education journey by learning all about mortgage pre-approvals.Read Now
Insurdinary Lets You Compare Mortgage Rates from Canada's Leading Lenders
When you're buying a home, you should shop around to make sure you're getting the best mortgage rate from one of Canada's most trusted mortgage companies. At Insurdinary, we make it easy to compare mortgage rates from top companies. We work with the mortgage broker Homewise to get the best rates for our customers and strive to make the process of getting competitive quotes as hassle-free as possible. To find a quote for mortgage rates, mortgage insurance, personal loans, and more, contact us using our online form or request a quote here. The online application process is simple and takes only a few minutes.