If you are going to submit an application for a mortgage, you will feel that you are in a sort of contest with the lender, since you are on two different sides of the issue. The lender wants the highest interest rate so he can make the most money, and you want the lowest interest rate so you can save the most money. A mortgage consultant (courtier hypothecaire) will act as a middle man in these transactions.
Is the broker on the side of the lender or the borrower in this situation? When you hear that the lending institution pays the broker's commission, you may think that the broker is going to work for the interests of the lender. This is not what happens.
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The home loan business is a very competitive business in Canada. Some of the larger mortgage brokers (courtier hypotheque) handle billions of dollars of mortgages each year. LendersLending institutions are interested in working with brokers so they can increase their loan business as much as possible.
The lending institutions pay all of the brokers about the same fee. Because of this, brokers (courtier hypothécaire) are fairly independent, since they are going to make the same commission from any one of the many lenders. The borrowers are pleased that the lender pays the fee, and he does not have to.
Fierce competition such as this leads lenders to partner with brokers and that a broker can show 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.
Since a broker will make the same commission from any lender, his goal will be:
oMake sure his clients are happy and will become repeat customers
oMake sure his clients are satisfied and will refer him to others
Mortgage consultants (courtier hypothecaire) earn their salary by the commissions they are paid. Their primary goal is to serve their clients and build up a reputation so that their business will grow based on recommendations.
The bottom line is that, even though the lender pays the fee, it is the borrower who benefits from this relationship, since the broker has to keep his clients happy.
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