Derek McGowan explains how mortgage brokers must disclose different rate options to clients. The government requires this transparency so you can compare financing choices and pick the best one for your situation.
Hey, It's Derek with McGowan Mortgages. I wanted to take a second and explain the anti steering disclosure. This one gets some questions from time to time, rightfully so. So I wanted to break it down. It's a lot more simplified once we just talk about it. So ultimately, because we are a mortgage broker, we have a wide variety of options we can help you find your best financing with. The government does want to make sure we're careful with power and they want us to look at the absolute lowest rate possible on the rate sheet and the absolute highest rate possible on the rate sheet and list those on this anti steering disclosure to make sure that the client or the buyer knows there were options. Now we then choose generally the best value because sure, that you could pay 20, 30, $40,000 in points and get a super low rate, but after a certain extent it gets very expensive to keep dropping the rate on purpose. The market does that. They kind of keep a buffer. So super far out options aren't that good. However, the government still wants to make sure that you, the client know that there are options on the rate sheet. So even on day one when we lock the interest rate in, usually I'm locking the rate in when I see, hey, the market's gotten as good as it's going to get and now it's starting to get worse. Like the market's going to reprice for the worst today I'm going to make sure that everybody, all of my clients are locked in and protected. We can then go back to that moment in time because we've locked in that rate sheet ultimately. So I'm going to pick the best value option because I have to make a call in some direction there to lock it in. But then even the next day we can go right back and say, all right, at that moment in time, here's all the options you can pick. So it's mainly letting you, the consumer know there are options. You get to choose your best option. We're here to help you choose on our side. Doesn't make a difference in any way really. The person wants the lowest or the highest or somewhere in between. Now, to me personally, it does matter because I want you to get your best deal and that's what I'm here for. It's my whole career is based on around. But the anti steering disclosure simply lists the rate that you actually have locked in with the amount of fees with that, which is generally a more normal level of fees and the lowest rate possible for a general underwriting fee, for example. And then the absolute highest rate, which will come with probably a little bit of credits, or the absolute lowest rate, which will come with a bunch of fees, a bunch of points to get that. So it's kind of creating the buffer and then you're somewhere in the middle. Generally, that's what this form's about, simple as that. Just let you know you have options. But if you have any other questions, we're here for you. Derek McGowan, Mortgages.
