Why do mortgage brokers favor their clients over the lending agencies?
by Gregory van Duyse
During the negotiation of your mortgage, two parties confront each other: the borrower and the lender. The former wants to pay less interest, and the latter wants to make the highest
possible profit. The mortgage broker mediates between these two parties to negotiate the conditions of the loan.
You might ask the question: “Does the broker work in the best interest of the borrower or the lender?” |
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The first thing to notice is that the commission is paid by the lender. This might lead us to think that the broker favors the lender's interests.
Is this true?
No. |
The role of the lender
The world of mortgages in Québec is very competitive. The biggest mortgage brokers negotiate several billion dollars in mortgages each year. More than 20 lenders wish to augment their volume by working through mortgage brokers, who present them with new loans.
All lenders offer brokers about the same commission, which gives the broker a certain independence and ensures that he will be compensated for his efforts.
(The borrowers are also happy that we charge no fees for our services!)
This competition means that lending agencies are partners and providers for our clients. In this manner, our clients (with our help) can present their dossier to 20 lenders without difficulty or extra effort.
Borrowers are our real clients.
The goal of the broker is to serve his clients, to find their best mortgage strategy and the best product for their needs.
The goals:
- To have clients who are satisfied for the rest of their lives!
- Our clients should be so happy that they refer us to their friends, family, and acquaintances.
Mortgage brokers are paid by commission. Their first interest is to serve their clients well, to have a good reputation, and develop a network of clients that speak of them to others.
In the end, it is the lender who pays but we favor the client (the borrower).
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