Why do mortgage brokers work for borrowers and not for lenders? (courtier hypotheque)
When you apply for a home loan, the two parties in the matter 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 profit (highest rate). A mortgage broker (courtier hypothécaire) will step in to help the borrower and lender to come to terms over the mortgage so it gets done.
Is the broker working for the lender or the borrower in this situation? When you hear that the lender pays the broker?s commission, you may think that the broker is going to work for the interests of the lender. This is not what happens.
The mortgage business is incredibly competitive, especially in Canada. There are some mortgage brokers (courtier hypothecaire) who generate many billions of dollars in mortgage loans every year. Lenders want to work with brokers to increase their loan business.
The lending institutions pay all of the brokers about the same commission. Therefore, brokers (courtier hypothécaire) are fairly independent, since they are going to make the same fees from any one of the many lenders. The borrowers are happy that the lender pays the commission, and he does not pay it.
Such stiff competition leads lenders to partner with brokers and that a broker can present a borrower?s loan file to 50 lenders without any extra work on the part of the borrower.
This is why the borrower can be considered a client of the broker (courtier hypothécaire). A broker will try to get the best home loan package for each of his clients.
The objective of a good mortgage broker are :
1) To create life time satisfied clients
2) To make them happy enough to refer the broker to friends, family and neighbors
A mortgage consultant (courtier hypothécaire) will earn his livelihood by the fees he receives. They want to build up a satisfied client base so that their reputation, and consequently the amount of business (and commissions) will grow.
The bottom line is that, even though the lender pays the fee, it is the borrower who benefits from this relationship, since the broker has to keep his customers happy.
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
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