| The facts about the mortgage market in Canada is | | | | brokerage scouts the market for the best mortgage. |
| that in the last forty years, it has undergone substantial | | | | The mortgage request of the client is tendered through |
| changes. Depository institutions account for the | | | | an electronic system to lenders. |
| majority of the market holding 69 percent of | | | | A mortgage agent is an individual who carries out |
| outstanding Canadian residential mortgage debt by the | | | | mortgage activities for a mortgage brokerage under |
| end of-2007. By the end of 2008, CAD 566 billion or | | | | the supervision of a licensed mortgage broker. The |
| 62 percent of the CAD 906 billion outstanding | | | | agent can only work for one mortgage brokerage. |
| residential mortgage debt in Canada was held by | | | | Under the Mortgage Brokerages, Lenders and |
| depository institutions. The main reason for the growth | | | | Administrators Act you have to be licensed to deal in |
| in the bank share was due to the 1992 Bank Act | | | | mortgages to be licensed, unless an exemption is |
| changes, which permitted banks to own trust and loan | | | | applicable. To be licensed, a mortgage agent has to |
| companies that had been dominant players in the | | | | meet educational requirements. To meet these |
| market. Prior to 1954, banks were not permitted to | | | | requirements, approved education courses must be |
| make mortgage loans. However gradually from the | | | | taken. Application for a licence must be within two |
| 1954 Bank Act amendments and thereafter, laws | | | | years of successfully completing the approved |
| allowed banks an expanding share in the market over | | | | education courses. These courses are provided |
| time. Yet, until 1992 conventional mortgages value could | | | | commercially, and tuition fees are set by the provider. |
| only be below 10 percent of bank deposits. Mortgage | | | | The courses use the same curriculum, but different |
| brokers have played a growing role in the market. | | | | providers may use different formats. All approved |
| A mortgage consumer survey conducted by the | | | | courses are followed by a final examination. |
| Canada Mortgage and Housing Corporation in 2009 | | | | The first step for obtaining a mortgage brokerage |
| revealed that between June of 2008 and June of | | | | licence requires passing the mortgage agent education |
| 2009, a quarter of all mortgage transactions were | | | | program. Then a mortgage agent licence should be |
| arranged through mortgage brokers. According to | | | | obtained. The mortgage brokerage education course |
| statistics, over 50 percent of the homebuyers accept | | | | must be completed successfully. Thereafter application |
| the first rate their bank offers. This means that the | | | | can be made for a mortgage broker licence. In the |
| majority are not using a mortgage broker who shops | | | | course of this process, the prospective broker should |
| around for the best rate for its client. However, among | | | | have worked as an agent for a year and worked |
| first-time buyers and young women, a rising number | | | | under a broker. |
| are turning to mortgage brokers. In the last decade, | | | | Brokers and agents do your research and shop |
| mortgage brokers have seen a surge in business. Ten | | | | around for the best solution. Financing your home |
| years ago, they comprised under 10 percent of the | | | | through a mortgage brokerage rather than a lending |
| mortgage market; today, they comprise 25 percent of | | | | institution can save you both time and money. They |
| the share. Brokers bring personalized service and they | | | | work on behalf of their client to find the most suitable |
| can be used to get banks to offer more favourable | | | | product at the best rate. Brokers provide access to |
| terms. | | | | virtually every mortgage product available. Consumers |
| There are several reasons for using an accredited | | | | expect their own bank will give them the best rate and |
| independent mortgage broker. They educates you on | | | | product. But, the bank does not have access to all the |
| your options. You get independent, unbiased advice. | | | | lenders and products available. The bank offers a |
| Unlike a bank employee, that is tied to a bank, an | | | | limited number of mortgages. But, the brokers provide |
| independent mortgage broker offers unbiased advice. | | | | access to over 400 mortgage products on the |
| As a freelancer, will not favour one lender over | | | | market. Each of these products have their own |
| another based on anything other than rates. They will | | | | distinctive features. They also have access to the |
| negotiate rates with lenders on your behalf and all their | | | | new products launching frequently in this dynamic |
| services are for free. Provincial laws require education, | | | | industry. Access to unique products also may only be |
| training and licensing standards for qualified brokers. A | | | | offered through the mortgage broker. |
| competent mortgage broker is licensed and in good | | | | A mortgage broker provides services free of charge. |
| standing with the provincial regulator. | | | | The lender pays for placing the mortgage with them. A |
| The main difference between a mortgage agent and | | | | broker is paid on the size of the mortgage, not the |
| a mortgage broker is that to be a mortgage broker | | | | rate. The commission they earn from the lender tends |
| requires at least two years of working experience. | | | | to be higher for a fixed term and lower for variable |
| The mortgage broker must pass an approved | | | | mortgage. Unlike the bank, business hours can extend |
| mortgage course. Mortgage agents must be | | | | beyond banking hours. They are often available on |
| supervised by a mortgage broker. Brokers work for a | | | | evenings and weekends. Brokers can renew |
| mortgage brokerage or on their own and bring | | | | mortgages as well. They can help with leveraged |
| together prospective borrowers and lenders. They do | | | | loans for investment. For first time home buyers a |
| not administer the mortgage. After the client fills an | | | | broker can help you through the various steps of the |
| application using the information contained therein, the | | | | process. |