Working with a licensed mortgage broker can help make the mortgage process easier to navigate. Instead of approaching a single lender, a mortgage broker licensee may work with multiple lenders to help identify mortgage options that align with your financial situation and borrowing needs.
In Alberta, individuals who provide mortgage brokerage services must be licensed through the RECA under the Real Estate Act. To obtain and maintain a licence, mortgage broker licensees must complete required education, pass examinations, and follow professional standards designed to protect consumers.
How a Mortgage Broker Licensee Can Help
Mortgage broker licensees can guide you through the mortgage application process. This may include:
- Explaining mortgage options and helping you understand which may suit your needs
- Assisting with gathering required documentation
- Submitting mortgage applications to lenders on your behalf
- Communicating with lenders throughout the process
- Helping move your application forward as efficiently as possible
Working with a licensed mortgage broker licensee means working with a professional who is accountable to a regulatory framework that supports professionalism, and consumer protection in Alberta’s mortgage industry.
It’s important that borrowers understand the relationship they have with their mortgage broker.
A mortgage brokerage may:
- represent the borrower (you);
- represent the lender; or,
- act as an intermediary.
Mortgage brokers have a responsibility to clearly explain their role to borrowers they’re working with.
It is the mortgage brokerage’s decision
Each mortgage brokerage decides its own business model. Some only represent lenders, some only represent buyers, and some will represent neither.
When a mortgage brokerage represents you, as a borrower, you are a CLIENT. They must act in your best interests at all times, and will owe you general, fiduciary, and regulatory obligations. These include undivided loyalty, confidentiality, full disclosure, obedience, reasonable care and skill, and full accounting. They will recommend financing options to you, advocate on your behalf, and provide you with confidential advice.
When a mortgage brokerage is representing the lender as their client, they will be acting in the lender’s best interests at all times, not yours. They can still work with you; however, they will treat you as a customer.
When you are a customer, the mortgage brokerage must:
- treat you honestly and act with reasonable care and skill
- gather information on the property you want to finance and on your financial situation
- explain the lender’s options to you
- complete the necessary documents and submit them to the lender
- tell you about the transaction’s progress and pass along any communications from the lender to you
The mortgage brokerage cannot give you advice or act in any way that would be a detriment to their client, which is the lender. The lender has their undivided loyalty.
A mortgage brokerage may act as an intermediary between you, as a borrower, and potential lenders. In this case, both you and the lender are customers of the mortgage brokerage.
The brokerage will facilitate the mortgage deal by gathering information, explaining the options, completing the necessary documents and keeping both sides apprised of the deal’s progress. They will not act to the benefit or detriment of you or the lender(s). Alberta mortgage brokerages often work as intermediaries when working with residential borrowers.