All Mortgages

Do I really need a mortgage agent? What a mortgage agent does in 2024.

June 27, 2024

When it comes to securing a mortgage or renewing an existing mortgage, why are some homebuyers or homeowners reluctant to speak to a mortgage agent? Is it because their parents had their mortgage with a bank? Is it the overall perception of banks being a long standing institution and the cornerstones of our communities? Is it simple lack of information?

Mortgage Agents and Banks: Opening new doors

The reality is that the landscape of mortgage lending is continuing to evolve. Consumers using a mortgage agent versus a bank is up to 36% and growing. An increasing segment of the population realize that banks might not be the best option. Limited product offerings, questionable sales recommendations and overall customer service are driving people to seek an alternative.

Consumers using a mortgage agent versus a bank is up to 36% and growing.

Banks can also only offer their own mortgage products. This limited selection means people may not qualify or have access to the best rate and terms. Borrowers with unique financial situations or lower credit scores may have an issue qualifying.

On the other hand, mortgage agents act as intermediaries between borrowers and multiple lenders, which means access to a variety of loan products from banks, credit unions, mortgage investment companies, and private lenders. But, perhaps the MOST overlooked benefit in working with a mortgage agent is something called "fiduciary duty".

Fiduciary Duty: An Expert on Your Side

A fiduciary duty involves actions taken in the best interests of another person or entity. Fiduciary duties include loyalty, good faith, confidentiality, prudence, and disclosure. Mortgage agents have a fiduciary duty to their clients, meaning we must act in our clients’ best interests and avoid putting our personal interests ahead of our clients.

Fiduciary duties include loyalty, good faith, confidentiality, prudence, and disclosure.

In Canada, the relationship between a bank and its mortgage clients is NOT considered a fiduciary one. This is considered a commercial relationship where each party protects its own interests. Communication consistency, complete transparency, and personalized service aside, mortgage agents take the time to understand the borrower’s financial goals, circumstances, and future plans. We then tailor the mortgage recommendation to align with these factors.

This level of customization ensures that borrowers get a mortgage that not only meets their current needs but also supports their long-term financial health.

My question would be, why would anyone want to work with someone who DIDN'T have their best interests as a priority?