Matt, good comments and insight as usual.

One of the most common questions a broker gets asked is how much do you charge for you services? When you tell them its Free they are puzzled.

Brokers get great rates and they can shop the mortgage around to many lenders. Each situation is different in its own way and I think brokers reflect that.

Like Matt says, we get rates that are better sometimes than even the branch can give. It sounds strange but its true.

Victor

Thanks for the info, definitely answered my query on cost between bank and broker. I suppose, in the main, the one thing I need to be wary of then when we take over the mortgage and should we decide to locate a better rate, is to watch for the fly by night brokers. Ah well, daddy is a banker, and so is mommy (and mom works in the central mortage unit for one of the big banks), so I can at least get lists of reputable local brokers!

a

vampchick...
I don't think you would pay any more money using either a mortgage broker or bank...

The mortgage broker might be able to give you better rates as they can shop multiple suppliers at once.

I'm not sure about the fees... I think the fees are built into the mortgage.
Somebody please correct me if I'm wrong.

Im a Collector.......who deals with collection agencies?

I am a mortgage broker in Winnipeg, CanadaMortgageTeam.com

Usually credit falls into 3 categories.
The good: beacon above 620 and you really have no limits what can be done. Today, rates can be as low as 4.39% on a 5 year term and some lenders even offer a "quick close special". This means that if we can close the deal (all paperwork, completed, signed and sent in and funds requested at the lawyers) within 30 days the rate can usually drop by 10bps or in this case down to 4.29% on a 5 year rate. Broker is usually paid by lending institution.

The bad: beacon score between 540 and 620. Usually this range is limited in what lenders will do. Rates would be around 7.5% or maybe 7% on a loan to value (LTV) of 80% for a 1 year term. Two things to look at: rate and length of term. Rate is not that good but its a one year term. Responsiblity is on you to fix your credit. Your broker should provide you with tips on what to do but in the end the onus is on the individual to fix up their credit. After 1 year then if your credit has improved you are back to the "good" category. Broker is usually paid by lending institution.

The ugly: beacon score below 540. This area is basically private money. Rates start at 9.95% and go up from there. Private lenders can be individuals or private lending companies in a city that the mortgage broker has access to. Loans may go up to 85% but mostly only 75% LTV. Broker in this case adds fees to the loan because private lenders don't pay brokers. Fees vary from broker to broker but expect 1 - 2% or sometimes a flat fee.

It really all matters on your credit and that is the Major driving force in todays world. These numbers are set out by CMHC and the goverment. They will NOT insure anything (there may be rare exceptions) where the beacon score is below 600. We have lenders who just flat out tell us, if its not 600 or better, don't waste your time.

Victor
CanadaMortgageTeam.com

Let me know if I can help with any questions.

Regards,

Darin

You are correct Ray, since my credit score was under the 620 mark (614 IIRC) in April of this year, I didn't qualify for the current mortgage that the GF and I have, so it is in her name. When we found the house we have made an offer on (cheaper due to the current market for much more house & property in my home town), the mortgage broker wanted to see my credit report, and it had risen to 628. She stated that my credit score and the items on it would make the cut with the bank, so I told her to go ahead and try. I was approved. Now, a month and a half later.....not only did we get the lower rate, but my score jumped again to 647 (I have found that improving your credit score can become an addiction, lol). On a side note, since beginning my quest to get a house about a year ago, my credit score has risen 108 points from then (the number 539 is burned into my memory) It all started with already having one credit card in long term good standing (3.5 years, no missed payments) , and a year ago I got a Capital One card, that again I haven't missed a payment on.

Hmmm....it would be pretty good to be able to get that low a rate with a credit score of 620. You must mean that a person who had a credit score of 620 might get accepted but not at the lower 4.89% rate.

Anyhow, on a 25 year, $250K mortgage paid monthly, you'll save just over 42K, and over $43K if you pay bi-weekly. That's not the present value of the money you'll save of course, but it still amounts to quite a bit.

Ray

Just got news from my Mortgage Broker, I currently have a deal in place on another house awaiting the sale of my current house. The Mortgage Broker phoned to tell me that the mortgage approval that I had in place for the future house has changed......apparently, she was able to drop my interest rate from 5.89% to 4.89%!!!! saving me approximately $40,000.00 dollars over the entire term. SWEEEEEEEET!

I recommend a mortgage broker, they will try anything within reason to get you a mortgage. Also, if you don't want to get a hard hit on your credit report, you can order it yourself online and send a broker a copy and they will be able too (for the most part) tell you if you need some work first or if you will be accepted for a mortgage. Also, I found that a credit score of 620 is the magic number for a mortgage acceptance, although there is other factors involved (ie. debt ratio, recent history, open accounts).