Why do mortgage consultants work for their clients and not for lenders? (courtier hypothecaire)

When you are discussing a mortgage, there are two participants, who are, in a way, adversaries: the borrower and the lender. They each want a different outcome. The borrower wants to pay the lowest possible interest, and the lender wants to make the most profit possible. A mortgage broker (courtier hypotheque) is there to help work out the terms of the loan.

So, you ask, is the mortgage broker there for the borrower or for the lender? If you know that the commission is paid by the lender, you may jump to the conclusion that the broker is there for the lender. Luckily, this is not so.

The home loan business is a highly competitive business in Canada. Some of the larger mortgage brokers (courtier hypotheque) handle billions of dollars of mortgages annually. LendersLending institutions are interested in working with brokers in order to increase their loan business as much as possible.

Brokers (courtier hypotheque) make about the same commission, regardless of which lending institution they work with. This makes brokers pretty independent, since they will get the same fee from any of the lenders. Borrowers are just as happy not to be paying this commission.

Here is what this kind of competition adds up to:
-Lenders team up brokers to be exposed to more loan business
-A potential borrower’s application can be reviewed by 50 or more lenders, without any additional burden on the borrower.

The borrower then actually becomes the client of the broker (courtier hypothecaire). A broker makes sure to serve his client by finding the best mortgage strategy and mortgage product for him.

Since a broker will make the identical commission from any lender, his goal will be:
•Make sure his clients are satisfied and will become repeat customers
•Make sure his clients are happy and will refer him to others
A mortgage broker (courtier hypothécaire) will earn his salary by the commissions he receives. They want to establish a satisfied client base so that their reputation, and consequently the amount of business (and commissions) will grow.

This shows that, even though the lending institution pays the broker’s fee, it is the borrower that the broker serves and wants to keep satisfied.

Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage brokers - courtier hypothécaire, please visit: Informezvous.com - hypothèques