Your Home Buying Team

Getting a mortgage is an important decision. You may want to consider putting together a team of professionals, which could include a real estate agent, mortgage lender, insurance broker, lawyer and a property inspector, to help you with your decision.

 

Mortgage brokerage

A mortgage brokerage is a business that is licensed by the Financial Services Commission of Ontario (FSCO) to carry out mortgage activities, such as arranging mortgages for Ontarians. A mortgage brokerage usually employs several mortgage brokers and agents who work with clients directly to find the best mortgage for their individual needs.

 

Every mortgage brokerage is accountable for its employees including brokers and agents. They must ensure their brokers and agents are licensed and follow the Mortgage Brokerages, Lenders and Administrators Act, 2006 . You can find a licensed mortgage brokerage near you by searching our database.

 

Mortgage brokerages are usually paid by the particular mortgage lender through commission. However, some brokerages may charge borrowers additional fees. It’s important to go over the details with a broker/agent during the first meeting. You can find a licensed broker/agent near you by searching our database.

 

Mortgage broker

A mortgage broker is an individual licensed by FSCO to carry out mortgage activities for a licensed mortgage brokerage. They may also be responsible for supervising several mortgage agents who work at his/her mortgage brokerage.

 

Mortgage brokers do not lend money to borrowers, but instead negotiate the best available terms and rates on their behalf with lenders.  They take into account a borrower’s financial history, down payment and the type of property they are interested in buying. They act as a liaison between a borrower and a lender and do much of the paperwork.

 

Becoming a mortgage broker requires at least two years of work experience, and the taking and passing of an approved mortgage broker course.

 

 

Mortgage agent

A mortgage agent is an individual who is licensed by FSCO to carry out mortgage activities for a licensed mortgage brokerage under the supervision of a mortgage broker. You can find a licensed mortgage agent near you by searching our database.

 

Mortgage administrator

A mortgage administrator is a business that is licensed by FSCO to receive mortgage payments from a borrower to send to a lender. Administrators are hired by lenders to monitor the agreement and take steps on their behalf to enforce payments.

 

Lender

A lender is any business organization, person, or group of persons who loans money for the purchase of a home. The home is security for the loan. Lenders will charge interest on the loan and agree with the borrower on the interest rate, payback timeframe and frequency. Banks are the most common mortgage lenders in Canada, but borrowers can also secure a mortgage from other financial institutions (credit unions or caisse populaires, loan and trust corporations, life insurance companies), pension funds, or from other organizations, individuals or groups (private lenders).

 

Private lenders who lend their own money on the security of real estate must be licensed if they are doing business as mortgage lenders. However, private lenders do not need to be licensed if they use a licensed Mortgage Brokerage.

 

Real estate agent

A real estate agent is someone licensed to represent a buyer or seller in real estate transactions. Real estate agents will help home buyers locate homes and negotiate the purchase price with sellers.  They will not help home buyers get a mortgage and will likely recommend buyers be pre-approved for one before putting in an offer. Real estate agents are paid a commission by the homeowner based on a percentage of the home’s purchase price.

 

Property inspector

A property inspector inspects homes before they are sold. They are usually hired by a home buyer to provide information on the condition of the home, including the plumbing, electrical work, insulation, heating and cooling systems, roof and structural stability, but can also be hired by the seller in order to speed up the process. They prepare a report that provides a list of repairs or code violations along with cost estimates. Buyers often use a home inspection as leverage when negotiating a home purchase if something substantial is found.

 

Real estate appraiser

A real estate appraiser is someone licensed to determine the market value of a home based on its condition and the recent selling price of similar homes in the area. The price estimate helps lenders decide if the money they are giving a home buyer is a good investment. Appraisers are also sometimes hired by a seller to help determine a listing price for their home or by a buyer to see if the offer they are prepared to make is reasonable.

 

Lawyer

A real estate lawyer ensures your paperwork is correct and that the transaction is complete. They will review the contract and mortgage documents, conduct a title search, purchase title insurance on your behalf, register the property in your name, obtain signatures, prepare a Statement of Adjustments that shows the amount you will pay in closing costs, and collect and disburse fees. Real estate lawyers will also hold your documents and down payment until the deal closes. Real estate lawyers are paid as part the closing costs of a home sale.

 

Mortgage Insurer

The Canada Mortgage and Housing Corporation (CMHC) , Canada Guaranty , and Genworth Financial Canada  provide mortgage insurance when a home buyer makes a down payment less than 20 per cent. It helps protect lenders against home buyers who are unable to pay their mortgage. The cost is charged to the lender who then usually passes it on to the borrower. The amount is determined by the size of the mortgage and down payment, and can be paid in a lump sum or added to the overall loan. Mortgage insurance is mandatory for down payments less than 20 per cent of the purchase price.

 

Insurance broker

An insurance broker is someone licensed by the Registered Insurance Brokers of Ontario (RIBO)  to provide insurance broking services for Ontarians. Some lenders will require the buyer to have home insurance before the closing date. An insurance broker will help buyers find the best coverage and price for their individual needs. Insurance brokers don’t provide the insurance, but will shop around to different insurance companies for the home buyer. Insurance brokers are paid by commission from the issuing insurance companies.

 

Insurance agent

An insurance agent is someone licensed by FSCO who sells home and other property and casualty insurance for one insurance company only.

 

Life insurance agent

A life insurance agent is someone licensed by FSCO who sells life insurance for one or more insurance companies. Creditor insurance can cover the amount of the mortgage loan. Other life insurance products, such as term life, can help cover the value of the mortgage loan.