Mortgage Broker Regulators' Council of Canada

Be Aware of Other Risks

Be cautious when you agree to a mortgage.

Be completely honest
It is important you are honest when you are applying for a mortgage. All of the information you give to a broker or a lender, including information on the mortgage application documents, must be accurate, complete and truthful. Errors in your application can easily lead to a mortgage that is not right for you. Misstating facts or providing false information in your mortgage application is illegal and can have serious consequences.

Don’t become a straw borrower
Never pose as the purchaser of a home or apply for a mortgage for someone else. Applying for a mortgage that is for someone else is called being a “straw borrower” and it is illegal. You will end up being responsible for the mortgage, in trouble with the law and possibly sued by the lender. If someone asks or offers you money to apply for a mortgage for someone else, say “No”.

Say “no” to cash payments
Never make payments, especially cash payments, without receiving a receipt. All payments for mortgage broker services are to be made to the brokerage or company and not to an individual. There should not be any surprise fees. You must be advised of these costs in advance. If a mortgage broker, agent or sub-broker asks for cash or payment made directly to them, say no and contact the brokerage and the regulatory authority in your province.

Think before using a mortgage to invest in something else
If you are being encouraged to take out a mortgage in order to invest into something, be sure that you understand all of the risks of the investment. Any investment involves a risk that you can lose some or all of your invested money. However, your mortgage loan will remain no matter what happens with the investment.

Beware of offers that are too good to be true
You may be approached with offers and services to help you save money on your mortgage. Be careful before agreeing to any plan promising you mortgage savings, especially if it sounds too good to be true. These plans can come with fees and charges that cost more than the promised savings. Also, your mortgage broker might be able to provide the same advice for free and your lender might be able to offer you the same savings by increasing the amount of your payments. When in doubt, ask another financial professional or mortgage broker for a second opinion.