Ask an Expert:
10 Burning Questions with Mortgage Broker Scott Brown
Buying a home can be stressful, especially when it comes to Toronto real estate! Competition in the city is fierce, but a lot of people’s stresses actually have to do with mortgages. I always suggest that my clients consult a mortgage broker. Today we’re asking one of Toronto’s top brokers, Scott Brown of Ultimate Mortgage & Finance Solutions, 10 burning questions!
1. What is a mortgage broker?
As a Mortgage Broker I work with various lenders to find the best deal for a client when they are buying a property, refinancing their existing mortgage, or if their mortgage is up for renewal. I’m the intermediary between a lender and a borrower who needs a mortgage loan.
2. How is using a mortgage broker different from using a bank for my mortgage?
As a mortgage broker I have access to over 70 lenders to ensure you get the best rates and product choices. When a client goes directly to one bank they only have that one bank’s rates and products to choose from. Also, with a broker you don’t have to go anywhere. It can all be done by email and phone.
3. I’d like to buy a home; should I start the process by speaking with a mortgage broker?
Ideally yes. By speaking with your mortgage broker first you can get pre-approved and know how much you qualify for before you go out house hunting. It’s also important to discuss rates, product options and go through your payments to ensure it fits within your desired budget. The broker will go through your closing costs, fees, the process etc., to ensure the transaction is a smooth and pleasant one.
4. What's the difference between fixed and variable mortgages and which should I choose?
Fixed rate mortgages have a set interest rate that will not change for the term. Variable rate mortgages fluctuate with the Bank of Canada prime rate. I would go through your situation and offer you both options to consider. Depending on your risk tolerance and your intentions with the property I would recommend one over the other.
5. Should I choose the option with the lowest interest rate?
Not necessarily. It depends on what your future goals and priorities are with the mortgage. Sometimes the lowest rate options come with restrictions that could affect you going forward.
6. Do you charge a fee to me?
I do not charge a broker fee for a residential mortgage. On a commercial or high-risk lending situation a fee may be involved.
7. What are other factors I should consider when choosing the best mortgage for me?
Ask yourself these questions: How long do you plan to own the house? Will you be living in it or making it a rental property? Do you anticipate any renovations coming up? Are you risk-tolerant?
8. What do you think will happen with rates in the near future? At the moment they are trending downwards but I anticipate they will bottom out sometime this year and start creeping up again in the following couple of years.
9. How long does qualifying for a mortgage usually take? It depends on the applicant but I can usually pre-approve someone in a quick 15 minute phone call.
10. Do you need to be qualified before you start looking for a house? Yes, it ensures no problems arise.