What does a mortgage broker do - ARCH

What Exactly Does a Mortgage Broker do?

Whether you’re a first-time homebuyer or you’re renewing the mortgage on your existing home, you have a very important decision you’ll need to make when buying your home: where to get the best deal on your mortgage.

For most Canadians, the default options is to get their first mortgage from their local bank branch, then just keep renewing it with the same bank every five years. Sure, this approach is fairly easy, and the experience is great but it’s always best to do your research before committing to any one particular lender. 

A popular alternative is to use a mortgage broker.

Mortgage brokers do not work for the big banks. Instead, he or she works for a mortgage brokerage that has access to many lenders, including banks, credit unions, and dedicated mortgage lending companies. The role of your broker is to shop around, finding you the absolute best mortgage for your situation from all of the available options.

When you use a mortgage broker, there’s still a chance you’ll end up with a mortgage from one of the big banks – but only if they have something great to offer you. Your broker will help you sift through all the options, help you comfortably decide on what’s best for your situation.

Here are some of the advantages of working with a mortgage broker:

Save time… lots of it

Rather than spending time on doing the research when it comes to rates, terms, and all of the other fun things, a mortgage broker will do all the shopping and comparing for you. You’ll be presented with an option or two, or even three that make the most sense for your situation. You’ll also have someone who can explain all the ins and outs so you can make a comfortable and informed decision without needing a Ph.D. in personal finance. Phew! 

Save money… lots of it

There’s a lot of misleading advertising from lenders trying to bait people with low-interest rates. A mortgage broker can help you figure out what’s what and, in many cases, will be more successful in finding and negotiating the best rate for you.

While the interest rate is very important, it’s actually not the only factor you’ll need to consider in the overall cost of a mortgage. For example, different lenders have different rules about how much you can prepay and when, or what happens if you need to skip a payment.

Even more significant are mortgage breakage fees. Life happens, and a great number of people end up breaking their mortgage before the maturity date. If you have a variable rate mortgage, the breakage penalty might be a few thousand dollars. If you have certain varieties of fixed rate mortgage, the penalty could be in the tens of thousands of dollars. A good mortgage broker will make sure you understand all of these details before you sign.

Save grief… lots of it

When you’ve started the home-buying process, there’s nothing worse than needing a mortgage but running into trouble qualifying for one. The major Canadian banks typically have the least lenient lending policies and can be especially befuddled by people with non-standard situations, such as those who are self-employed or those who are financing an investment property.

This is another area where mortgage brokers can help. With access to smaller, more specialized lenders on top of the big banks, your broker has a lot more options to get you the financing you deserve. Sometimes people find they can start with a short-term mortgage from a specialized lender then switch to a mainstream bank once they are more established. Mortgage brokers can make this type of scenario possible.

Some food for thought

Purchasing a home (whether it’s your first or not) is likely one of the largest financial decisions of your life, and a mortgage is a huge financial commitment. That’s why it’s generally a mistake to “jump the gun” and accept the very first offer that comes your way. There is zero risk in exploring a wider range of options outside of your local bank, and that often involves the aid of a mortgage broker. 

It’s important to keep in mind that mortgage brokers work on commission which is generally close to 1% of the value of your mortgage. So, for example, a $500,000 mortgage comes with a $5,000 commission cheque for the broker. This creates an incentive for them to get you the biggest mortgage they can. 

Here at Arch we work several leading mortgages brokerages and brokers across the country who can help get you into your first (or second) home by working closely with you to understand the full scope of your needs. If you’re looking for a mortgage broker to work with, our team can help connect you to the right firm and professional that will put your best interests forward. 

4 benefits brokers and agents gain from using ARCH down payment program

4 benefits brokers and agents gain by using ARCH

The ever-rising housing costs and regulations around purchasing a home in Canada not only makes the dream of home ownership difficult for first-time home buyers, but it also makes the role of real-estate professionals ever-challenging.

When your clients are faced with rules and regulations that become obstacles, it means you’re also faced with figuring solutions that fit their situation, and will actually benefit them in the long run. 

One of the major challenges that has become a topic of discussion across the Nation, is down payment requirements. To no surprise, most Canadians have the liquidity to take on and carry mortgage costs, but they lack sufficient funding to put upfront for the down payment.

And if you’re clients have been faced with this, which is probably likely, you’ll know all too well how disheartening it can be for individuals and young families looking to get into their first home. 

Well, we’ve got good news!

We’re actively partnering with local real-estate networks, agents, as well as mortgage brokers and agents who are looking for new, alternative, and innovative ways to help their clients get into their first home.

The reason is quite simple.

Working together means we can help more first-time home buyers achieve their goal of becoming home owners. And without having to feel like they’ve been stretched too thin.

By partnering with us you’ll gain immediate benefits that will both help you continue to grow your business as well as make your clients happy.

Here are 4 benefits that you’ll gain:

1. Help your clients get more value

Partnering with ARCH means that you’ll help your clients access a legitimate source of funding for the down payment. Which is exactly what they’ve been looking for.

That means your clients can take a deep sigh of relief knowing they won’t have to save every penny of theirs to come up with the 5% minimum, because they’ll now have the full amount. And you know what that means? It means they won’t have to settle on the size or amount of a home, because their approval amount will likely increase as a result of having the full amount for a down payment.

And it also means that you can now become the real-estate superhero your clients have been dreaming of.

2. Convert renters to homeowners

Partnering with ARCH means that you’ll have confidence in offering home ownership support to your clients that are currently stuck, or at least feel like they’re stuck, in the rental market.

It’s time to help your clients stop paying for someone else’s mortgage and create the opportunity for them to start building their own equity.

3. Re-engage with past, previously unprepared clients

 Chances are you have dozens, if not even hundreds, of potential clients who became interested in purchasing their first home, but fell short due to the down payment requirements.

Well, now you can start re-engaging with past clients who weren’t quite ready to make the commitment due to this barrier, letting them know that the wait is up and that home ownership is calling their name. 

4. Access a trusted, professional network

When you partner with ARCH, you gain access to the various real-estate organizations that we work with, in addition to our network of qualified first-time home buyers.

We’re focused on a win-win-win approach.

The better we can help your clients gain comfort in the home buying process, the better we are able to help them reach their real estate dreams. 

Getting your clients into their first home

There’s no argument that saving up for the down payment is one of the major challenges most Canadians are struggling with when it comes to purchasing their first home.

But it doesn’t have to be, not anymore.

By having access to the full down payment through ARCH’s program, we are able to help your clients reach home owner status.  

October 2020 Housing Market Update with ARCH

Canadian Housing Market Update: October 2020

According to the recent housing data published by CREA (Canadian Real Estate Association), Canadian home sales remain historically strong in October 2020. For many, the strength of the market in October continues to show no signs of slowing down any time soon, and making up for the quiet (compared to normal) activity we saw during the Spring months. Here's a quick recap of what we saw in October 2020:
  • National home sales edged back 0.7% on a month-over-month (m-o-m) basis in October.
  • Actual (not seasonally adjusted) activity was up 32.1% year-over-year (y-o-y).
  • The number of newly listed properties rose 2.9% from September to October.
  • The MLS® Home Price Index (HPI) rose 1% m-o-m and was up 10.9% y-o-y.
  • The actual (not seasonally adjusted) national average sale price posted a 15.2% y-o-y gain in October.
June 2020 Housing Update - Arch

Canadian Housing Market Update: June 2020

According to the recent housing data published by CREA (Canadian Real Estate Association), Canadian home sales and new listings were on the rise again in June. For many, this is a great sign of the economy working on recalibrating from previous slow months in April and May due to many unforeseen factors thanks to economic and societal pressures as a result of the COVID-19 pandemic.

Here’s a quick recap of what we saw in June 2020:

• National home sales rose 63% on a month-over-month (m-o-m) basis in June.
• Actual (not seasonally adjusted) activity was up 15.2% year-over-year (y-o-y).
• The number of newly listed properties climbed 49.5% from May to June.
• Actual (not seasonally adjusted) new supply stood 4.8% above June 2019.
• The MLS® Home Price Index (HPI) rose 0.5% m-o-m and was up 5.4% y-o-y.
• The actual (not seasonally adjusted) national average sale price posted a 6.5% y-o-y gain.