When you are negotiating a mortgage, there are two participants, who are, in a way, opponenst: the borrower and the lender. They each want something different. 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.
So, you ask, is the mortgage broker there for the borrower or for the lender? If you realize that the commission is paid by the lender, you may have the conclusion that the broker is there for the lender. Luckily, this is not so.
The mortgage business is a very competitive business in Canada. Some of the larger mortgage brokers (courtier hypotheque) broker billions of dollars of home loans annually. LendersLending institutions want to work with brokers so they can increase their loan business as much as possible.
Lenders offer all brokers (courtier hypothecaire) about the same commission. This means that each broker can be fairly independent, since he will make the same commission regardless of which lending institution he works with. (Of course, borrowershome buyers) like this arrangement since it means that they do not have to pay a fee.)
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 effort by the borrower.
This is the reason the borrower can be considered a client of the broker (courtier hypothécaire). A broker will try to get the best mortgage package for each of his clients.
The objective of a good mortgage broker are :
1) To create clients for life
2) To make them happy enough to refer 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 fees will continue to grow.
This shows that, even though the lender pays the broker’s fee, it is the borrower that the broker works for and wants to keep satisfied
