A mortgage lender is an entity, often a bank, that provides financing for the purchase of real estate. They will then use a mortgage as security for the lending of money. A mortgage lender may also be a lender to owners of real estate, but not necessarily for its purchase. In this case they may be loaning money to a borrower for other purposes, but will still take a mortgage as security for the money loaned.
The mortgage lender is the entity that actually provides the funds to the buyer and will retain the mortgage on the property. After the mortgage is secured, the lender may sell the mortgage loan to another entity who would then becomes the mortgage holder.
In Canada, five banks (the Big Five) comprise 60% of the residential mortgage lending market. They are:
- Royal Bank of Canada
- Toronto Dominion Bank
- Bank of Montreal
- Bank of Nova Scotia
- Canadian Imperial Bank of Commerce
Though the percentage of these five banks may sound high, it also means that 40% of the remaining mortgage lending market is controlled by numerous mortgage lenders outside of the Big 5.
MORTGAGE LENDERS AND MORTGAGE BROKERS
A borrower need not deal directly with a mortgage lender to secure a mortgage loan. Often, mortgage brokers are used to secure a mortgage loan with a mortgage lender, on behalf of a borrower. The mortgage broker will negotiate with the mortgage lender, or numerous mortgage lenders, to secure a mortgage loan. The mortgage application, documentation and closing will also be handled through the broker.
At First Foundation, we have ongoing relationships with a number of mortgage lenders and believe that more choices our customers have, the better rate they can secure and the more personalized of a product they can receive.
Home Loan Lenders
Do Homebuyers Need the Big Five?
If you are interested in learning more about mortgage lender, please feel free to contact us today!