The facts about the mortgage market in Canada for prospective homeowners
The facts about the mortgage market in Canada is that in the last forty years, it has undergone substantial changes. Deposit takers represent the largest share of the market with 69 percent of outstanding Canadian residential mortgage debt at end 2007. As of end 2008, CAD 566 billion or 62 percent of outstanding residential mortgage debt of CAD 906 billion in Canada was held by depository institutions. The main reason for the growth in bank participation was due to changes in the Banking Law of 1992, which allowed banks to own trust and loan companies that had been dominant players in the market. Before 1954, banks were not allowed to make mortgage loans. However, gradually from the Banking Act amendments of 1954 and thereafter, the laws allowed banks an increasing share of the market over time. However, until 1992 the value of conventional mortgages could only be below 10 percent of bank deposits. Mortgage brokers have played an increasing role in the market.
A survey of mortgage consumers conducted by the Canada Mortgage and Housing Corporation in 2009 revealed that between June 2008 and June 2009, a quarter of all mortgage transactions were arranged through mortgage brokers. According to statistics, more than 50 percent of homebuyers accept the first rate their bank offers. This means that most are not using a mortgage broker looking for the best rate for their client. However, among first-time homebuyers and young women, a growing number are turning to mortgage brokers. In the last decade, mortgage brokers have seen an increase in business. Ten years ago, they comprised less than 10 percent of the mortgage market; today, they comprised 25 percent of the share. Brokers provide a personalized service and can be used to get banks to offer more favorable terms.
There are several reasons to use a reputable independent mortgage broker. They tell you about your options. You will receive independent and impartial advice. Unlike a bank clerk, who is linked to a bank, an independent mortgage broker offers impartial advice. As a self-employed person, you will not favor one lender over another based on anything other than rates. They will negotiate rates with lenders on your behalf, and all of their services are free. Provincial laws require education, training and licensing standards for qualified brokers. A competent mortgage broker is licensed and in good standing with the provincial regulator.
The main difference between a mortgage broker and a mortgage broker is that to be a mortgage broker requires at least two years of work experience. The mortgage broker must pass an approved mortgage course. Mortgage brokers must be supervised by a mortgage broker. Brokers work for a mortgage agency or on their own and bring together prospective borrowers and lenders. They do not manage the mortgage. After the client fills out an application using the information contained therein, the brokerage searches the market for the best mortgage. The client’s mortgage application is submitted through an electronic system to the lenders.
A mortgage broker is a person who performs mortgage business for a mortgage broker under the supervision of a licensed mortgage broker. The agent can only work for a mortgage agency. Under the Mortgage Brokers, Lenders and Servicers Act, you must have a license to deal with mortgages to obtain a license, unless an exemption applies. To become licensed, a mortgage broker must meet educational requirements. To meet these requirements, approved education courses must be taken. Application for a license must be made within two years of successful completion of approved education courses. These courses are offered commercially and tuition fees are set by the provider. The courses use the same curriculum, but different providers may use different formats. All approved courses are followed by a final exam.
The first step in obtaining a mortgage broker license requires passing the mortgage broker education program. Then a mortgage broker license must be obtained. Mortgage Broker Education Course must be successfully completed. Thereafter, a mortgage broker license can be applied for. In the course of this process, the prospective broker should have worked as an agent for one year and under the orders of a broker.
Brokers and agents research and look for the best solution. Financing your home through a mortgage broker instead of a lender can save you time and money. They work on behalf of their client to find the most suitable product at the best price. Brokers provide access to virtually every mortgage product available. Consumers expect their own bank to offer them the best rate and product. But, the bank does not have access to all available lenders and products. The bank offers a limited number of mortgages. But brokers provide access to more than 400 mortgage products on the market. Each of these products has its own distinctive features. They also have access to the new products that are frequently released in this dynamic industry. Access to exclusive products may also be offered solely through the mortgage broker.
A mortgage broker provides services free of charge. The lender pays to place the mortgage with them. A broker is paid by 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 an adjustable mortgage. Unlike the bank, business hours can extend beyond banking hours. They are usually available at night and on weekends. Brokers can also renew mortgages. They can help with leveraged investment loans. For first-time homebuyers, a broker can help you through the various steps of the process.