Red Deer Mortgage Broker

Is it your first time buying a home in Red Deer? Enlist the help of a Red Deer mortgage broker. We’ll help you find a reliable lender, navigate the loan application process, and negotiate the best mortgage rates. 

One question that may be lingering in your mind is how much Red Deer mortgage brokers charge. The truth is the fees vary depending on different factors. Read on to find out.

Who is a Mortgage Broker?

A mortgage broker is an intermediary between the lender and the broker. The professionals help you find the best mortgage for your budget and need when buying a property or refinancing a mortgage.

The mortgage broker also ensures your loan matches a particular lender well and you get the most competitive rates. The professionals work with a vast network of lenders, enabling them to find suitable financing options beyond large banks.

How Much Does it Cost to Hire a Mortgage Broker in Red Deer?

Often mortgage brokers charge a fee for their services. The fee can range from 0.5-1.2% of the mortgage amount, but federal law caps broker fees at 3%. This means if the borrower receives $500,000, the commission will be $2500. 

Typically Red Deer mortgage brokers charge a flat fee or a commission. If the borrower pays them, the broker charges a flat fee, usually paid at closing or financed by the mortgage. 

In most cases, the broker charges the lender a commission, and the fee isn’t added to the borrower’s closing costs. Typically, there isn’t much difference between a mortgage broker paid by commission or a fee. 

Mortgage brokers paid by commission still offer helpful advice on the best mortgage deals in Red Deer as those receiving brokerage fees. However, it’s best to ask the broker to clarify the arrangement beforehand.

Ensure the mortgage broker doesn’t work with only a few lenders and can advise on all the available loan products. Sometimes, paying an upfront fee guarantees the best mortgage deal. 

It happens when the mortgage broker finds a deal with a better value in the long term, and the commission isn’t enough for the work done.

Brokers receive the commission only after the borrower signs the mortgage, but they may earn extra income through renewal fees and trailer fees. 

The broker charges a renewal fee every time the borrower renews the mortgage with the same lender, while a trailer fee is a fee the lender pays the broker as long as the borrower stays with them. Lenders pay these fees to encourage borrower retention.

Why Should You Work with a Red Deer Mortgage Broker?

Working with a Red Deer mortgage broker allows you to get the best mortgage rates which could mean thousands of dollars in savings during the loan term. You also have peace of mind knowing that you’re working with a qualified professional who has your best interests at heart. 

Moreover, working with a mortgage broker levels the playing field more than if you worked alone. The broker’s vast network of lenders lets them compare loan products and find the most suitable lender and rate for your needs.