subject: The Facts About The Mortgage Market In Canada For Prospective Borrowers [print this page] The facts about the mortgage market in Canada reveal its nature and the roles played by mortgage brokers in the process. The biggest segment of the market is banks that have gone from not being involved to market making dominance in less than fifty years. Prior to 1954 they were not permitted to be lender of mortgages. By year end 2008, 62 percent of the outstanding CAD 906 billion worth of residential mortgages was held by them. By 2007, nearly seventy percent were of residential mortgages were theirs. The reason for this dramatic change was that in 1992 banks were allowed to own the major players in the market after the changes of the 1992 Bank Act.
As revealed by a 2009 survey, mortgage brokers have seen rising useage; but, still they are not the dominant source of loan provision. From constituting 10 percent of the market a decade ago, brokers now comprise around a quarter. Over half of homebuyers go to their bank and accept the first rate offered. They miss out on the possibility of a mortgage broker finding them a better rate and loan terms.
An accredited independent mortgage broker can be a boon. The broker can be a source of free unbiased guidance. The broker helps the customer learn about the options and negotiates rates on your behalf with lenders. Licenced brokers are qualified under applicable provincial laws and in good standing.
Unlike the mortgage agent, a mortgage broker is required to have at least at least two years of experience. The mortgage broker has to pass a higher level mortgage broker course. Mortgage agents can be supervised by a mortgage broker; and not the reverse.
A mortgage agent can only work for one mortgage brokerage. The agent must be licensed, which requires fulfillment of certain educational requirements. An agent should apply for a licence has to be within two years of completing the education courses. Such courses are offered commercially with tuition fees set by the provider. The formats of the courses may differ; although the curriculum is the same. An exam must be taken after course requirements.
A broker has first qualified and worked as an agent. A broker also has successfully taken a mortgage broker course. After taking of the course, the broker has been approved for a licence.
Brokers research mortgage options and seek the best result for the client. Using a mortgage broker can save you money as well as your time. Brokers have access to far more mortgage products than individual lenders. Lenders only have limited offerings. Brokers also have access to unique products.
A mortgage broker provides services free of charge. The lender pays the broker for placing the mortgage with them. A broker is paid on the size of the mortgage, not the rate. The commission they earn from the lender tends to be higher for a fixed term and lower for variable mortgage. Unlike the bank, business hours can extend beyond banking hours. They are often available on evenings and weekends. Brokers can renew mortgages as well. They can help with leveraged loans for investment. For first time home buyers a Mortgage broker can help you through the various steps of the process.
