A mortgage broker can save you a ton of time and money.  Rather than spending time comparing every mortgage rate you can find, doing some negotiating with a few of them, and hoping you didn’t miss anything in the process, you can just call up a professional who might know about some opportunities you missed.

There ARE some concerns you should have when speaking with a mortgage broker.  Like any other professional service, you want to know that they have the knowledge and experience to help you, and that they truly have your best interests in mind.

Here are some questions to ask your mortgage broker to make sure you’re getting the help you need:

1. How Long Have You Been a Mortgage Broker?

Experience is important in any industry, and real estate is no exception.  No matter which mortgage you end up signing up for, it’s going to cost you thousands and thousands of dollars.  Even a small percentage point difference or a different payment schedule can save you thousands or cost you thousands more.  Now is definitely not the time to wing it with the new guy!

2. Are You Licensed?

In Canada, there is no federal governing organization for mortgage brokers.  Each province has their own standards, which you should be aware of before speaking to a broker.  Confirm that they are licensed properly in your province and also find out if they belong to any mortgage associations like CAAMP (Canadian Association of Accredited Mortgage Professionals).

3. Do You Specialize in _________?

If there is anything unique about your situation, it’s helpful to work with someone who has a fair amount of experience with similar cases.  If you’re new to Canada, run a home-business, are interested in a rental property, are looking to flip the house, or any other type of specialized situation, ask the broker for their experience and advice.

4. How Have You Helped Clients Like Me Before?

If you DO have a specialized situation, it’s good to hear some specific examples of how they’ve helped people like you.  Detailed examples will convince you that they really ARE specialized in your area and you can be more confident that they’ll give you the help you need.

5. Where Do You Find New Clients?

If they typically get clients via word of mouth then you can be pretty sure they do a good job for their clients.  If they rely on their office or a web search to funnel them leads, it’s not necessarily a bad thing, but referrals are definitely a plus.

6. Can I Have Some References To Contact?

Now you want a list of those clients so you can get some feedback from the people they helped.  Don’t skip this step.  It might be weird calling up a complete stranger, but if that homeowner had a good experience, they’ll be happy to speak with you.  On the contrary, if they had a bad experience, they’ll probably be more than happy to complain as well.

Always remember that no one will willingly give out bad references.  The few you get might be the ONLY happy clients that this broker has.  That’s why it’s important to ask specific questions to find out how exactly they helped.  Asking “did they do a good job?” isn’t enough.

7. What Type of Loan is Best for My Situation?

Depending on your unique situation, a certain type of loan might be more appropriate.  If your broker can recommend one that really does apply to your situation it’s further evidence that they’re a good choice. 

You should also do your own research on this point.  It only takes a minute to Google: “best mortgage type for flipping a house Canada”, and you should have a better idea of if your broker knows what they’re talking about.

8. How Do You Get Paid for Your Services?

A mortgage broker typically gets paid by the lender, not by you.  Free help is great, but you sometimes get what you pay for.  If your broker has an agreement with certain lenders for a higher fee, they may be influenced to choose in their own best interest instead of yours.  Don’t be afraid to ask this question, as a broker who has a close relationship with several lenders will be able to negotiate more strongly on your behalf and get you the best deal possible.

9. How Will Your Recommendation Help Me Achieve My Goals?

This is a bit abstract, but based on your situation and your goals, is your broker’s recommendation the best way to get there?

For example, if you want to pay off your mortgage as fast as possible, it’s important to have an excellent pre-payment policy and you definitely want to be doing bi-weekly payments.  A broker who fails to recommend these or take them into account is one you want to avoid.

Do Your Homework

You’re choosing to work with a mortgage broker because you want someone’s expertise, but don’t ignore your own ability to do some research.  You’ll be living with these decisions for a LONG time, so learn as much as you can about every aspect of your mortgage and make the most informed choice possible.