What is a broker?
A broker is a person or company that buys, trades, or negotiates on your behalf. A broker isn’t actually selling you a product or service. Rather, they’re connecting you to a provider or buying a product for you, as an intermediary. Some common types of brokers are mortgage brokers, stock brokers (including online brokers), and GIC brokers.
A broker will buy, sell, trade, and negotiate on their client’s behalf. A broker provides intermediary service and connects their client to the entity selling or buying the products in questions. The most common brokers Canadians include mortgage brokers and stock brokers.
Pros and cons of using brokers
A broker will possess expertise in their field and often have autonomy in their operations. With that being said, brokers typically can offer independent and expert advice in their field and are not require to push certain products on their clients. Another benefit of brokers is their access to markets that may not be available to retail consumers.
What is a mortgage broker?
A mortgage broker serves homebuyers by searching the market for the mortgage with the lowest rate and desired structure and features. A mortgage broker will compare the rates of the banks and private lenders to find competitive offerings and often are able to secure special deals. A mortgage broker provides expert advice on the specific products and assesses the needs and circumstances. Mortgage brokers generally are paid in commission at the time of the mortgage deal closing.
Alternatively consumers are able to approach their own bank as well as other banks and lender to seek out the best mortgage option, the downside is the time spent searching and comparing and the advice provided may be tilted to favour the employee of the lending institution as they work for the bank, not the consumer.