• Avatar


    Common Questions Answered by Rowan Smith:

    There is a lot of confusing misinformation spread by the media. With mortgage and financing rules changing constantly, it can be tough for a person to know the state of the financing market at any one point in time. It is critical that when shopping for a mortgage, a person needs to use a qualified, full-time mortgage broker whose job it is to stay on top of the ever changing rates and rules. While your own bank might provide a personalized service level, they have their own interests at heart. Mortgage Brokers are neutral third parties that can provide educated and informed advice as to what your best options are given your unique financial situation.

    When asked several common questions that many borrowers have, here were Rowan’s responses:


    Q – “How long have you been in the business?”

    R – “I started in banking in 1999 with a local credit union and learned the basics of mortgages, investments, and general finance. In 2006 I left the bank to start my own mortgage practice, and in 2012 became a co owner of one of Vancouver’s larger brokerages. My practice has expanded to include commercial mortgages, construction, lines of credit, and credit counselling where appropriate.”

    Q – “Is the rate you’re quoting me the lowest rate for that term on a lender’s broker rate sheet?”

    R – “This depends. Oftentimes, the best rate isn’t the best overall package for a client. Many deep-discount mortgages come with confusing and punitive penalties, a lack of portability or prepayment options, or other ‘quirks’ that make them less than ideal. It is important that we determine what matters most to a client and ensure there are no surprise fees or “fine print” that costs a lot of money down the road. If a client only cares about rate, I will give them my best rate, but always ensure a proper discussion occurs that addresses all facets of a mortgage and not just the price tag, which is the rate. Just like buying a car, it makes no sense to only judge a car based on the sticker price. It’s equally important to see what is under the hood, etc.. The same goes for mortgage financing: it is important to know what flexibility exists to pay it down, move it to your next home, borrow more in the future, or bridge financing to the next home. Any discussion of a mortgage without looking at all aspects would be doing clients a disservice.”

    Q – “How long will it take for my loan to be approved?”

    R – “Just like everyone else, I like to get answers fast. If a client has an accepted offer, there is no reason that I cannot get an approval, with conditions, the same or next day. From there, we will know all paperwork a lender will want to see. I work diligently to make sure we have all paperwork in place before they write the offer. This makes the full approval process typically between 24 and 48 hours. If an appraisal is required, potentially another day could be added to this. However, I have partnerships with several appraisers and always work to get a full approval in place within 48 hours so it is binding. It can be faster, but this could result in rush fees to some of the service providers such as appraisers, but never to me.”

    Q – “Do you charge me a fee?”

    R – “Whenever I place a mortgage with a bank, credit union, or broker-channel lender, there are no fees for my services. People may hear of brokers charging fees, but this typically is for very complicated private financing, construction financing, or financing that ties up several properties or assists with foreclosure, to name a few examples. For 99% of borrowers, there should be no fees. If you are getting a bank mortgage from a mortgage broker and they are charging a fee, you need to ask why, or better yet, give me a call instead.”

    Q – “What is the difference between a PRE-approval and a full approval?”

    R – “When banks do a pre-approval, they are really just holding the rate and assuming the applicants’ income will line up according to their policies. They don’t do any “underwriting” or formal paper collection to verify anything. I consider it my job as a broker to collect all relevant paperwork so that I know a pre-approval will hold up once it goes to the full approval stage. A full approval is when the bank has formally committed to the mortgage and given an approval based on a full review of all supporting income documentation, credit, property, and down paymen. Banks do NOT review all paperwork for a pre-approval in most cases. Do not assume because you have a pre-approval that it will get formally approved when you find a home. Too many people have called me after being told one thing and had the rug pulled out from under them once they write an offer. It’s my job as a broker to make sure the pre-approval will get final approval by collecting paperwork up front and provide advice as needed.”

    Q – “Why go to a Mortgage Broker versus my own bank?”

    R – “When you go to your bank, they are selling you their rate and their product. No matter how friendly they appear at the bank, the staff ultimately work for the bank, not you. They will encourage you to take their product as that is their job. As a broker, I am a neutral third party whose goal is to get you the best overall package, not just rate, on your mortgage. I work with over 30 banks, credit unions, and trust companies and have allegiance to no one in particular. There are no fees to use my services when getting a bank mortgage, and I keep the banks honest by offering you my best rate out of the gate rather than grinding and negotiating like we are buying a used car. When a client works with me, they get fully educated during the process and understand not just their rate, but all the other ‘fine print’ that is vital to the long term cost savings of their mortgage.”

    Q – “Do you only use a small group of lenders that are your favorite?”

    R – “Just like anyone else, I have my favorite lenders. This is typically the result of them having the best rates, terms, and service. Service is a huge issue that gets overlooked amidst all the ‘rate fever’ that people sell on the internet. If I can get a rate, but it takes 2 weeks to get it, what use is that during a purchase transaction with dates and deadlines? I need to get the best terms, best rate, and a turn-around time that works for my clients’ situations. I have several lenders I prefer to use when possible, but I always go to the lender with the best overall package and my preferences take a back seat to my clients’ needs.”


    If you would like Rowan to take a personal look at your situation and see what is in your best interests for your mortgage call him any time at 604-657-6775 or reach out to him by email at rowan@citywidemortgage.ca

Leave a reply

Cancel reply