Why do mortgage brokers represent the client interests insted of lender's interests? - courtier hypothécaire

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 transaction. The lender wants the highest interest rate so he can make the most money, and you want the lowest interest rate so you can have the lowest mortgage payment. A mortgage consultant (courtier hypothecaire) will act as a middle man in these negotiations.

So, you ask, is the mortgage consultant there for the borrower or for the lender? If you know that the commission is paid by the lender, you may jump to the conclusion that the consultant is there for the lender. Fortunately, this is not so.

The mortgage industry in Canada is extremely competitive. Some large mortgage brokers originate several billion dollars of mortgages every year. A lot of lenders want to work with mortgage brokers (courtier hypothécaire), who can give them additional business.

Brokers (courtier hypotheque) make about the same commission, regardless of which lending institution they work with. This makes brokers fairly independent, since they will get the same fee from any of the lenders. Borrowers are perfectly happy not to be paying this fee.

This is what this kind of competition adds up to:
-Lenders team up brokers to be exposed to more mortgage business
-A potential borrower’s application can be seen by 50 or more lenders, without any added burden on 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 home loan package for each of his clients.

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

Mortgage consultants (courtier hypothecaire) earn their money by the fees 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.

So, you see that even though the lending institution pays the fees of the broker, it is the borrower the broker is working for.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage brokers - courtier hypotheque, please visit: Hypothèques - Mortgage loans

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