What is the best mortgage advice for new buyers?

Commission. Usually, lenders pay brokers a “procuration fee”, which is about 0.35% of the transaction, and acts as a commission that is based on the size of your loan. But do not worry: the commission does not impact the cost of your mortgage. And before you apply for the loan, they are obligated to tell you the amount they will be paid.  

Fees. The other scenario is that a broker will charge you a fee directly, which can even be on top of the commission, or instead of a commission. In that case, you will be refunded the commission and charged a fee. Brokers are considered “independent” if they offer you the choice between commission or fee.  

Most reputable brokers charge you roughly 1% of the value of the mortgage, even if you have a bad credit rating. More than 1% is advisable to walk away from. You should know, as well, that so long as you are told upfront, fees can be charged at any point during the mortgage process. Once again, you should avoid any broker that charges you a significant fee prior to completion. You may be on the hook even if the purchase falls through.  

Are you qualified?  

You must ensure that the broker who is advising you is a qualified mortgage advisor. Prior to giving recommendations on the most suitable mortgage product for you, a broker must assess your eligibility and your needs. By ensuring your broker is qualified, you will also gain the most protection as a consumer. In case there is any wrongdoing, the Financial Ombudsman should be able to investigate. 

Before you move on, we recommend that you read our advice on the seven types of mortgages you can qualify for. You may not be aware of everything as a first-time homebuyer. 

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