The short answer
The ten questions
1. How many lenders do you compare, and which ones for my profile?
A broker should name the lenders it compares and explain why they fit your file. Self-employed income, newcomers and rental buildings are not read the same way from one lender to the next.
2. Who pays you, and do fees apply to my file?
In most residential files the lender pays the broker at funding. Fees may be added for private, commercial or specialized financing, and you must know them in writing before work starts.
3. What rate am I qualified at, not just what rate do I get?
The lender qualifies you at a higher rate than your loan’s: for an uninsured loan, the higher of the contract rate plus 2 points and 5.25%. That rate sets your maximum price.
4. How is the penalty calculated if I break the loan before maturity?
A variable rate usually costs three months’ interest. A fixed rate costs the higher of three months’ interest and the interest rate differential, calculated by the method in your contract.
5. What prepayment privileges does the contract offer?
Some contracts allow lump-sum payments or a payment increase each year without penalty. The limits vary by lender.
6. What does this loan cost in total over the term, not just per month?
The monthly payment hides the difference in rate, fees and interest. Compare the cost over the term and the balance at maturity.
7. Which documents, and by when?
Proof of income, the source of the down payment and property information are reviewed first. A complete file saves days.
8. What happens if a lender declines my file?
A decline is not the end: another lender may read the same file differently, or a few months of preparation can change the result.
9. Is this rate guaranteed, and for how long?
Ask in writing for the length of the rate hold and what happens if rates fall before funding. Many lenders adjust downward, but you have to ask.
10. Are you registered with the AMF, under which certificate and for which firm?
A mortgage broker in Quebec is regulated by the Autorité des marchés financiers. Check the name and certificate in the public register.
Frequently asked questions
Should I ask these before the first meeting?
Ask them at the first meeting. A comfortable broker answers directly and in writing.
Can a broker guarantee the best rate?
No. A broker can compare, explain and negotiate; the final rate depends on your file and the lender’s analysis.