Real Estate Terms
Mortgages
Home Buying Tips
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If you need a mortgage to finance a residential or commercial property, get ready to do your homework - there's a wide selection of lenders and loan products out there, and you'll have to shop around to find the best deal.
Many people choose to work with a mortgage broker, an independent contractor who matches borrowers with lenders. The mortgage broker can do the legwork for you, examining the offerings from many lenders before presenting you with the best options.
You can get a good deal by working either directly with a banker or through a broker. But in either case, it's imperative that you choose a reputable company. Ask friends, family members and colleagues in the area who recently went through the process who they used and whether they received good service, competitive rates and low fees.
People who work in real estate, such as real estate lawyers and brokers, deal with local mortgage bankers and brokers on a regular basis, and they know who the good ones are.
CAAMP (Canadian Association of Accredited Mortgage Professionals) and IMBA (Independent Mortgage Brokers Association) offer a stringent code of ethics for their members and a certification program for mortgage brokers who meet certain requirements.
You may search these trade association's Web site to find member brokers in your area.
If you choose to work directly with lenders, don't just go with the first one you talk to, no matter how helpful and knowledgeable the person on the phone sounds or how low the rates and fees seem. Call several lenders to compare rates and fees. Ask whether there will be any costs in addition to the ones mentioned.
Similarly, if you work with a broker, ask him to present several options to you.
When you sit down with a banker or broker, he or she should take the time to explain financing options and all associated costs. This may take a while, particularly if you're taking out a residential mortgage for the first time.
If you don't understand the loan terms, feel rushed or otherwise have a bad feeling, don't enter an agreement with that company. A reputable lender or broker will not pressure you into choosing a particular loan. If you think the broker or banker is putting undue pressure on you, choose someone else.
Beyond rates and fees, you will want to deal with a lender who's easy to get on the phone, particularly if complications arise on the road to closing. The lender should be flexible and willing to work in your timeframe. After all, you're the client, and the lender is a vendor that is working for you - not the other way around.
This article provides general information and some common sense suggestions for visitors to this website. While it contains useful ideas, it should not be considered a professional guide on any of the subjects discussed.
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