Transcript of Video Blog:
Hi, everybody. It’s Rowan Smith from the Mortgage Centre. I want to talk today about rates and fees. I heard something that was very disturbing to me again. I heard a broker that was charging a very large fee to arrange a mortgage for a borrower through a bank. Now I’m going to explain how our industry works, and perhaps to the dismay of some agents out there.
We are compensated when we sell a mortgage by the bank. Now this is assuming that this is a bank mortgage. If this is a private mortgage or something arranged through a mortgage investment corporation or subprime lender, we may not be getting paid anything. In those cases, you will pay a fee.
But if you’re looking at an institution that is charging cut rates, like rock bottom rates, has the names like TD, CIBC, Scottish bank if you’re seeing those names on the mortgage commitment, and the broker’s charging you a fee, they are also going to be getting paid on the back end by the lender.
Now why am I telling you this? Because I’m tired of seeing it. I’m tired of seeing borrowers in perfectly good situations paying these extra fees to pad the wallets of these guys who are making way too much money doing no more work than I do.
I don’t charge fees on any bank mortgages. That’s a promise to anybody that’s listening. If you get a mortgage through me, there will never be a fee to deal with a specific tier one bank. I would never be charging those fees.
The lender may charge a fee if I’m doing a bankruptcy discharge, or there may be individual fees associated with applications and stuff, but that has nothing to do with the brokerage fee. I as the broker will never charge my clients a fee if I’m putting them with a bank.
Now there are a lot of extenuating circumstances: commercial mortgages, private mortgages, all that type of stuff where there might indeed be fees. I’ll very upfront and tell you when that’s going to apply. I’m not going to spring it on you at the closing date.
You’re going to know long in advance, as soon as you get an approval, if a fee is going to apply. You’re probably going to know it before that, because I’m going to tell you if that’s the situation.
Again, if you’re dealing with a bank, there shouldn’t be any fees, and for you brokers out there that are changing fees on bank deals, I’m here to eat your lunch.
For the Mortgage Centre, I’m Rowan Smith.
