About Mortgage Brokers in Alberta
Answers to some of the commonly asked mortgage questions.
What is AMBA?
The Alberta Mortgage Brokers Association (AMBA) is the collective voice of the mortgage brokerage industry in Alberta. AMBA develops a standard of excellence for its members through advocacy, education, information and networking. AMBA promotes an ethical and sustainable mortgage industry for consumers and industry members.
What is a mortgage broker?
Mortgage brokers are independent professionals who work as liaisons between the borrower (you) and the lender (bank) to negotiate mortgage loans. They are specialists who facilitate the transaction from start to finish.
A mortgage broker can help you to find the best mortgage option for your situation. Rather than working for one financial institution, they deal with many different financial institutions on a daily basis. This allows them to offer you more choices and competitive options.
How does a mortgage work?
A mortgage is a loan designated to help you purchase a home or property.
When a home buyer purchases a home they make a down payment on the purchase price and then borrow the difference from a lender. The lender then provides a mortgage loan equal to the difference between the down payment and the purchase price of the home.
Once the buyer takes possession of the home, they begin to make regular payments to the lender to pay back the amount they borrowed, called the principal, plus interest, according to the terms and conditions negotiated.
The longer it takes to pay back a mortgage, the more interest paid. The higher the interest rate, the higher the regular payments. If the owner defaults on the loan – that is, regular payments are not being made – the lender can take ownership of the property.
How does one qualify for a mortgage?
Lenders will check whether you qualify for a mortgage by looking at your income, your credit history and the amount you can put towards a down payment. They will also look at your current assets and level of debt.
Why use a mortgage broker?
Your broker can help to educate you on which mortgage is best for you and your financial future at no cost to you and will help you to find the best mortgage option for your situation. Rather than working for one financial institution, they deal with many different financial institutions, and this allows them to offer you more choices and highly competitive options.
How do brokers find the best options for me?
Mortgage brokers can offer you competitive mortgage rates and unique mortgage products because they study mortgage rate markets and have direct access to variety of banks and lenders.
Are mortgage brokers employed by the banks?
No they are not. After making sure they understand your needs, they will present you with different options for you to make a decision, then present lenders with your information and situation.
How do mortgage brokers get paid?
Even though your broker works for you, they get paid by the lender (not you). They're paid a "finder's fee" by lenders as a reimbursement for bringing them creditworthy customers.
Here's how it works: After your broker has analyzed your financial situation and goals, they search for a lender in their lender community that will best meet your needs. Once you make your final choice, your mortgage is placed with the lender. In most cases, after all the details are taken care of and your mortgage is complete, your broker will receive their "finder's fee" from the lender.
In most cases, the lender will pay the fees. However, in some cases, whether institutional or private, the lender will not pay the fees or will only pay half. Also, in some situations broker and lender fees may apply.
Finding a Broker
AMBA members are the best in the business and adhere to strict ethical rules and regulations determined by the association.
Use our Find A Broker directory to search for an AMBA Mortgage Professional to help you with your mortgage.