As a Calgary-based mortgage broker, the question often gets asked what do we do, and how are we different from a bank.
In this blog, I am going to briefly talk about Alberta mortgage brokers, and how they work in Canada's banking system with a regional focus on local mortgages (Calgary, Edmonton mortgages, etc.)
1. What is a Mortgage Broker?
In a nutshell, they are independent, trained specialists licensed to represent and provide you with the best advice for your home or property financing needs.
They are retained by the client to shop the mortgage market (including banks, trust companies and other financial institutions) and to provide independent advice in choosing a mortgage commitment to fit the client’s particular needs.
It is a similar service as that of an insurance broker or travel agent in that the professional is highly trained within a very complex industry.
- Often they can obtain home loan commitments with better terms, options and interest rates than the client can obtain on their own;
- Saves you considerable time and effort; and
- Potentially save thousands of dollars over the term of a mortgage.
The mortgage broker is typically paid a fee by the lender upon successful funding (no charge to client). If the broker intends to charge you a fee, as would be the case in commercial, agricultural, business and non-bank (private) lending, this must be disclosed up front to the client.
In Canada, there are provincial licensing requirements:
- An Alberta mortgage broker is only licensed to arrange financing for Alberta residents.
- As long as the client is an Alberta resident, they can arrange Calgary mortgages, mortgages in Edmonton, Red Deer mortgages, a mortgage in Toronto, or any location in Canada for that matter.