Lower mortgage interest rates can be great for Canadians looking to purchase homes or refinance their current loans, but Financial Institutions Commission (FICOM) CEO Carolyn Rogers recently expressed concern regarding the potential for predatory practices among unscrupulous mortgage brokers.
“Compensation in [the broker] business is largely volume driven, ” Rogers noted at a conference held by the Mortgage Brokers Association of BC. “So I wonder what the chances are that anyone ever has a conversation with a borrower about whether they can really afford the home they are buying, and the mortgage that goes with it, particularly if interest rates rise.”
Make Sure Your Mortgage Works for YOU, Not Just Your Broker
Most mortgage brokers are honest and straightforward deal-makers who want their clients—homeowners and lenders alike—to find good matches with each other. It’s good for the broker when it comes to establishing long-term relationships, and its good for lenders and borrowers to make sure mortgage payments fit comfortable in the borrower’s budget.
As with any industry, though, there are some brokers who will try to make a quick buck by making mortgage deals at dollar amounts higher than a purchaser or refinancer can actually afford. More expensive mortgages mean more money in the broker’s pocket, and for a few operators in the Canadian mortgage industry this can be enough incentive to throw ethics and their clients’ best interests out the window.
Make sure you find a mortgage broker you can trust, and go over the details of your loan and your monthly mortgage payments with a careful and conservative eye. The right broker won’t try to talk you into buying more home or borrowing more than you truly need or can easily afford, so if you’re feeling pressured don’t be scared to walk away.
There’s always another mortgage broker just around the corner who will be more than happy to help you get the home and the loan that’s right for you, not just the brokerage.