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(Jan 21, 2024)

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Many Canadians find themselves relocating from one province to another, and with such mobility, a common question arises: If I buy property in another province—whether for rental, recreational, or residential purposes—should I consult a mortgage broker in the province I’m moving to, or can I stick with my current local banker or broker, even if I’m planning to leave?

In almost all cases, the answer is yes, you should consider working with a broker in the province where you plan to make the purchase. Here are two reasons why:

Varying Lender Policies:

Lenders across Canada have different policies regarding this matter. Some insist that a broker must be licensed in the province where they arrange financing, while others are more flexible. However, this flexibility can have implications, as some lenders explicitly reject applications from brokers outside their provincial jurisdiction. By limiting yourself to a local broker, you might miss out on better rates or a wider product selection from lenders you wouldn’t have access to otherwise. It’s worth noting that Credit Unions are gaining popularity among Canadians for mortgages. Though not the primary choice for all, those securing financing with a Credit Union face limitations tied to provincial borders. Credit unions in Canada operate on a provincial basis, so if you’re moving from Ontario to Alberta, only an Alberta mortgage broker can facilitate a mortgage with an Alberta credit union. Conversely, an Ontario mortgage broker cannot secure financing for your Alberta property with an Ontario credit union.

Errors and Omissions Coverage:

Like other service-oriented professions, such as realtors, accountants, and lawyers, Canadian mortgage brokers carry errors and omissions coverage. This insurance protects them in case of disputes or liabilities arising from a real estate transaction. However, most coverage providers consider any mortgage transactions completed outside the broker’s licensing jurisdiction as a breach of policy, resulting in no coverage in the event of a dispute or settlement.

How to proceed going forward?

Choose a Licensed Broker:

Work with a broker licensed in the province where you intend to purchase.

Co-Broker or Referral:

If dealing with a mortgage broker in your current province while purchasing in another, ensure they are co-brokering with a licensed broker in the target province. Co-brokering is an option available to all Canadian mortgage brokers. Instead of a formal arrangement, many brokers prefer direct referrals to the broker in the purchasing province, streamlining the process and enhancing the applicant’s experience. Often, the two brokers agree on a commission split within regulatory guidelines.

Purchasing in another province? Call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko. You can also call Marko on WhatsApp.

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