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Why Do Mortgage Brokers Represent The Client Interests Instead Of Lender's Interests? - Courtier Hypo
When you are negotiating a home loan, 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 interest rate, and the lender wants to make the most amount of money possible. A mortgage broker (courtier hypotheque) is there to help work out the terms of the mortgage.
Is the broker working for the lender or the borrower in this case? When you hear that the lending institution pays the broker’s fee, you may assume that the broker is going to work for the interests of the lender. This is not how it happens.
The mortgage business is a highly competitive business in Canada. Some large mortgage brokers (courtier hypotheque) handle billions of dollars of mortgages each year. LendersLending institutions are interested in working with brokers in order to increase their mortgage business as much as possible.
The lenders pay all of the brokers about the same commission. Therefore, brokers (courtier hypothécaire) are fairly independent, since they will make the same fees from any one of the many lending institutions. The borrowers are happy that the lender pays the fee, and he does not pay it.
Fierce competition such as this leads lenders to partner with brokers and that a broker can present a borrower’s loan file to 50 lenders without any extra work on the part of the borrower.
This is the reason the borrower can be considered a client of the broker (courtier hypothécaire). A broker wants to get the best home loan package for each of his clients.
The objective of a good mortgage broker are :
1) To create life time satisfied clients
2) To make them happy enough to recommend the broker to friends, family and neighbors
If the broker (courtier hypotheque) is making his living by commissions, he has to build a strong reputation among borrowers and potential borrowers so that his commissions will continue to grow.
The bottom line is that, even though the lending institution pays the commission, it is the borrower who benefits from this relationship, since the broker has to keep his clients happy.
Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage brokers - courtier hypothécaire, please visit: Hypothèques - Mortgage loans
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