Why do mortgage brokers work for their clients and not for lenders? (courtier hypothecaire)

When you apply for a home loan, the two parties to the transaction are somewhat at odds with each other. The home buyer wants to get the best (lowest) interest rate he can and the lending institution wants to get the most profit (highest rate). A mortgage consultant (courtier hypothécaire) will step in to assist the home buyer and lender to come together over the mortgage so it gets done.

Does this mean that the broker works for the lending institution or for the borrower? If you know that the lending institution pays the broker’s commission, you may come to the conclusion that the broker works for the lender, but this is not true.

The home loan business is extremely competitive, especially in Canada. There are some mortgage consultants (courtier hypothecaire) who produce many billions of dollars of home loans every year. Lenders want to work with brokers to increase their loan business.

The lending institutions pay all of the brokers about the same commission. Therefore, brokers (courtier hypothécaire) are fairly independent, since they will make the same commission from any one of the many lenders. The borrowers are pleased that the lender pays the commission, and he does not pay it.

Competition like this makes lenders want to team up with brokers to expand their business prospects, and it means that a borrower’s file can be seen by dozens of lenders.

This is the reason the borrower can be considered a client of the broker (courtier hypothécaire). A broker wants to get the best mortgage package for each of his clients.

Since a broker will make the identical fee from any lender, his goal will be:
•Make sure his clients are satisfied and will become repeat customers
•Make sure his clients are happy and will recommend him to others

If the broker (courtier hypotheque) is making his living by fees, he has to build a strong reputation among borrowers and potential borrowers so that his commissions will continue to grow.

All of this means that, even though the lending institution pays the broker’s commission, it is the borrower that the broker works for and wants to keep satisfied.

Article Source: http://www.christiannotepad.com

Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage brokers - courtier hypothécaire, please visit: Informezvous.com - hypothèques