Frequently Asked Questions About Mortgage Services
Whether you’re looking to expand your business, raise money for land acquisition, or a financial windfall to buy equipment or materials, mortgages are an easy way to raise the necessary capital. However, when it comes to the mortgage and finance sector, you may have many questions but often find answers difficult to come by.
RS Mortgage Solutions wants to arm you with the most accurate information to help you make informed decisions. To do this, I’ve answered some of the most frequently asked questions about mortgage services.
1. What is the difference between a mortgage broker and a mortgage agent?
Both mortgage brokers and mortgage agents are industry professionals licensed by FSCO to carry out mortgage activities for licensed mortgage brokerage. However, a mortgage broker may also be responsible for supervising several mortgage agents who work at the brokerage. They take into account a borrower’s financial history, down payment, and the type of property they are interested in buying while negotiating the best available terms and rates on the client’s behalf with lenders.
2. Why is it necessary to hire a mortgage agent?
Hiring a Mortgage Agent is a good option if you are unfamiliar with obtaining a mortgage and don’t want to spend a lot of time understanding the industry’s nuances. A Mortgage Agent can advise you on how to go about getting the mortgage loan and give you a fair estimate of the charges that the lender will add.
An experienced mortgage agent can additionally help you find the right lender and mortgage product that fit your needs quickly and with minimum effort from your side.
3. Variable rate mortgage vs. fixed rate. Which is the best option?
If the financial uncertainty of a variable-rate mortgage doesn’t scare you, in a low-interest-rate environment, a variable-rate mortgage could be a better choice because the rate is likely to be lower than a fixed-rate mortgage, which can save you a lot of money.
However, if you like knowing your mortgage payment will stay the same, regardless of the mortgage rates rising or falling, then a fixed-rate mortgage is your best choice.
Either way, speak with a mortgage specialist to make the right decision, as selecting the wrong mortgage product may cost you thousands of dollars wasted on interest payments.
4. How do mortgage brokers get paid?
Traditionally, mortgage brokers get paid a commission by the lender that was selected during the mortgage application. The commission is usually a small percentage of the mortgage loan amount, which will be paid out to the individual or firm after the client closes their mortgage.
However, you may have to pay a broker fee depending on the mortgage product. Traditionally broker fees are an additional cost to the client, associated with certain specialty mortgage products such as B-Lenders (alternative lending) or when using a private lender. In these situations, a client may be asked to pay a 1 to 3% broker fee based on the mortgage amount to the broker upon closing on their mortgage.
If you have any more questions about mortgage and lending options, get in touch with the expert at RS Mortgage Solutions. As a leading mortgage agent in the Durham region, ON, I have around two decades of experience in real estate, mortgage investment, and land development. I am passionate, committed, and here to understand your needs to help you smoothly journey towards homeownership. I offer several mortgage services, including mortgage purchase, mortgage refinancing, alternative lending, renewals or switch mortgages, private mortgage, reverse mortgages, and construction loans.