If you have decided that a mortgage broker will best suit your buying needs, you will want to ensure that you know how to make your broker work for you. Getting the most from your mortgage broker is relatively easy, but you must make sure to ask all the right questions.

To begin, let's talk about your money. You have probably heard about those dishonest brokers that manage to wrangle extra fees and rates from unsuspecting customers - don't wind up one of these victims. Instead, make sure that you are getting the most from your mortgage broker by asking them to list all fees up front. This way, if your broker is adding on a few fees here and there, you will have evidence that the new fees are unjust.

Also, make sure that your broker provides you with a detailed listing of all the lenders that they work with. At this point, go over the list of lenders and make sure that you are not missing out on a loan that you broker does not have access to. Of course, during this time you should also be aware of any lenders that your broker is constantly trying to thrust in your face, which should automatically be a sign that you need to switch brokers.

Once you are sure that all fees and lenders are disclosed from the beginning, treat your broker in much the same way that you would expect a psychologist to treat you - in short, make your broker match your loan personality to that of a great bargain. Some brokers are simply lazy, and they have no interest in spending the time to make sure that you needs are fully met. If you choose to allow a broker to simply select a lender for you without asking you any detailed questions, you are not getting the most from your mortgage broker.

When it comes down to it, your mortgage broker is really working for two people: yourself, and a lender. Lenders generally tend to have much more to offer a broker than an individual does, but that doesn't mean that there are some very reputable brokers out there. You will simply have to shop around when it comes to finding a broker, and when you do find one make sure that they work to your advantage.

Getting the most from your mortgage broker is not a difficult task, but it is one that requires a bit of know-how. Remember that your mortgage broker will be finding you a loan that will likely stick with you for some time, so make sure that your broker really knows what you need.

Once upon a time, a New Mortgage Lender was established in Canada.  This New Mortgage Lender was designed to lend on ‘out of the box’ cases (also dubbed ‘B’ mortgages, Alt-A or Sub-prime mortgages) where a client that didn’t exactly conform to the general underwriting rules and requirements of ‘A’ mortgage lenders could still be approved for mortgage financing.   (It is important to note that several lenders in this line of business continue to exist in Canada today and fulfill an safe, valuable and highly important niche for borrowers across the country.)

Things were going great for this New Mortgage Lender for several years since it started up business with a head office, a website and marketing material, business development officers stimulating independent mortgage professionals across Canada to send business their way, top-notch mortgage underwriters to review and approve transactions and the like.  Borrowers were getting their files approved with this New Mortgage Lender when other mortgage lenders would say ‘too much risk’, ‘we need a co-signer’, ‘if they are willing to take a longer term to ensure that they get on more stable ground before the mortgage matures, we’ll write the deal’ and the like.  In many cases, the New Mortgage Lender self-insured the deal, creating an in-house version of what the larger mortgage insurance programs in Canada do to protect the lenders’ assets against client payment default.

Things looked pretty great for everyone involved.

Then came the economic downturn.  This was caused by a variety of factors, but one of the most prevalent ones was that the lenders such as this New Mortgage Lender would package up bundles of these mortgages into a financial tool called a Collateralized Debt Obligation, or CDO, and sell them off to second-tier institutional investors (trust funds, hedge funds, pension funds and the like).  Of its own merit, this is a viable financial model that has been commonly used for a multitude of financial products and commodities for decades.  In fact, it is still used ongoing for many financial products and commodities.

Simply put, the tool wasn’t the issue, but the process was.

Very roughly, where the wheels fell off of the proverbial economic cart was when the investment banking firms stick-handling the packaging and re-selling of these CDOs stopped (to a certain degree) reviewing the actual risk quotient of the contents of the CDO bundles and effectively started following general risk models for the commodity as a whole.  In simpler terms and my humble opinion, this is something like the security guard at the airport letting people walk through the screening checkpoint without scanning their bags or patting them down based solely on the fact that they bought a plane ticket.  If you’re curious to learn more, this process and the after-effects are summarized in a movie, Margin Call, released in the USA in 2010 and Canada in 2011.

Did you know?

In addition to the provincial and municipal rebates that you may be eligible for when you upgrade your home (windows, furnace, roof, etc…), you could also save on your mortgage default insurance premiums if you buy a green home or upgrade your current one?

CMHC has added environmentally friendly features to the Mortgage Loan Insurance it offers.   If your higo-ratio mortgage was insured by CMHC whe you purchased an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, a 10% refund on the Mortgage Loan Insurance premium may be available. You could also have the added flexibility of an extended amortization (up to a maximum of 35 years) without a premium surcharge.

Is there a catch at all?

Here’s how it works:

If You’re Thinking of Buying or Building an Energy-Efficient Home.