Wondering when did mortgage brokers start? A mortgage broker is a “middle-man” that works with buyers and lenders to ensure that the borrower gets the best deal. This is done by an intricate and detailed process. The mortgage broker has to gather all of the financial documentation of the borrower, including details about the income, employment and assets of their client. This information is then used by the mortgage broker for a detailed analysis about the financial situation of the borrower.
Once the mortgage broker has a clear picture of whether their client will be able to secure financing or not, they start looking for a lender. This lender can be a bank, or even a direct lender, who is willing to provide the loan that the borrower is looking for. During the search for an appropriate lender, the mortgage broker might even propose a loan amount and loan type they think will be best for the borrower.
Read on to find out what you need to know about mortgage brokers.
When did mortgage brokers start?
If you are like most people, you might have wondered ‘ when did mortgage brokers start ?’ The history of mortgage brokering dates back to as early as 1893 when a firm named Sonnenblick-Goldman was founded in the United States. The purpose of the firm was to manage and arrange debt financing for real estate projects which were difficult to finance. It was around this time that several people were denied loans by the banks.
People who had been following the trends of the real estate market keenly knew that this was an opportunity which could not be missed. This opportunity was the foundation that answers the question ‘when did mortgage brokers start?’ Since the masses became increasingly desperate for loans, but were turned away by the banks, certain professionals of the real estate industry took it upon themselves to create a system which could unite wealthy people with loan seekers. This was the beginning of mortgage brokerage as we see it today.
Earlier, mortgages in Canada could only be provided by insurance companies. This changed in 1954 when the Bank Act was passed. Even though the Bank of Montreal had been founded in 1817, banks could not be involved in the mortgage market for residential real estate.
How can a mortgage broker help?
It is a universally known fact that seeking a mortgage without professional help can be extremely daunting and intimidating. Most people are not aware of the terminologies and jargon which is involved in seeking a mortgage or a loan. A professional mortgage broker, owing to their years of experience and expertise, will not only be able to help you understand the real estate industry better, but they will also ensure that you are choosing the mortgage deal which is right for you.
If you are considering a mortgage in Canada, it is imperative for you to do your research and hire a professional mortgage broker. This way, you will not only be certain that you can easily make the payments, but the stress involved in seeking a mortgage will also be minimised