Brokers

Top 4 Tips for Mortgage Brokers to Effectively Package Deals

You create solutions for your clients by addressing their unique circumstances. The process of packaging the deal is ultimately communicating your client’s story and the proposed solution to the lender.

By remembering these four tips, you will be able to package deals effectively:

Tip #1: Understand your client to provide strong lender notes.  

• Hear their story: ask open-ended questions and probe for explanations
• Identify the challenges of their situation
• Document the complete picture, providing strong lender notes

Tip #2: Know your lenders and the niches in which they operate.

• Know your lenders’ niches, lending areas, and special programs
• Match your client’s profile/circumstances with the right lender
• Be up front about what the client’s challenges are and what documents you can or cannot provide
• Contact your BDM to discuss the detail

Tip #3: Be clear on how the solution will help your client.

• Know the benefits of the deal and how they meet your borrower’s goals
• Focus on what’s important to the borrower e.g. payment over rate
• Communicate with the underwriter for any questions regarding the commitment
• Let your underwriter and BDM know if there are objections you can’t overcome in the event adjustments can be made

Tip #4: Formulate and communicate your exit strategy.

• Explain to the borrower why they didn’t qualify with an A lender and why you selected the chosen lender
• Plan for the end of the term
• Suggest actions the borrower can take to help themselves in the future
• Be specific and measurable in your action plan for the borrower: “You need to pay $X on your credit card and $X on your loan each month.  That will bring your balances to $X in 12 months and improve your credit score by the end of the term.”

With strong communication and planning, you can implement solutions that create better tomorrows for your clients.

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 23-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, please visit Magentainvestment.ca.

3 Tips for Planning an Exit Strategy

For your clients who need a quick-fix mortgage, putting together an exit strategy is a must!

Here are three tips for planning an exit strategy that will help you transition your borrowers:

1. Begin Right Away: Successful exit strategies depend on getting started right away. The best practice is to formulate a plan while the ink is still drying on the quick-fix mortgage. This is especially true if bruised or thin credit necessitated the short-term, higher rate mortgage, as credit takes time to build and repair.

2. Diagnose the Problem: In order to find a solution, it’s important to know where your borrowers are struggling. The culprit is usually bruised or thin credit, but in this age of entrepreneurs, proving income may also be an issue. No matter the problem, there are almost always ways to address it and fix it.

Here are some tips to help borrowers improve their credit situation:

3. Follow Up: Set milestones for your borrowers and check in on them regularly to make sure things are progressing according to the plan you set up.

If everything is coming along nicely, you can begin building the file for their transitional refinance nice and early and have it ready to go when the quick-fix mortgage renews!

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 24-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.

Getting to ‘File Complete’: Using Checklists to Complete the Package

Tips for Mortgage Brokers

One of the most useful tools to help complete a file, is a good old-fashioned checklist.

Checklists are easy to create, easy to use, can be implemented at any stage of a file, and are one of the simplest ways to make sure you get to ‘File Complete’ with the fewest hiccups.

Checklists for Borrowers

Introducing a checklist system can happen right from the initial interview with the borrowers, and before the file has been submitted.  After taking an application, you will have an idea of which documents will be required right away.  You can either create different types of checklists for different types of files, or you can create one checklist and simply highlight the things you need from your clients on each different file.

For example, you may have one checklist for traditional income, and one checklist for Business for Self (BFS) files.  You might also have one checklist for purchase files, and one checklist for refinance files.

There will be overlapping requirements – every borrower will be required to present valid photo ID, for instance.  For the most part, however, you can customize a system that works best for you and for your clientele.

Checklists for Brokers

While it’s a good idea to place a checklist noting all required documents into the hands of the borrowers, it’s also a good idea to keep a copy of that same checklist for yourself!

The necessary items may arrive in one big package, or the borrowers may bring things in as they find them, etc.  If you have a copy of the checklist, you can tick items off as they come in.  You can also add a column to keep track of whether you’ve sent the documents to the lender, and whether they’ve been approved.

Depending on your file load at any given time, you may want to have a system to keep track of which stage your files are sitting.

It’s fairly standard to keep a ‘Closings Calendar’, for any files that have been instructed and have firm closing dates, but it’s not as common to keep a checklist in each file to let you know at a glance at which stage a file is in the process.  You can have a checklist that has columns like: ‘Pre-Submission’; ‘Submitted’; ‘Approved’; ‘Declined’; ‘Complete’; ‘Instructed’; ‘Closed’.

Utilizing a checklist system is a great way to ensure that you get the paperwork needed to complete your file, and a great way to remind yourself and your team if it’s time to follow up with a lender or law office!

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 24-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.

Packaging Your Deal: Top 5 Things to Include in Your Submission Notes

Crafting a mortgage file for submission is an art, but did you know that your submission notes can be one of the most important parts of your deal?

Thorough broker notes can lead to speedier approvals and a smoother underwriting process.

Here are the top 5 things you should always be including in your submission notes:

1. Your Contact Details: Be consistent about putting your best contact telephone number and your business email address in your notes, especially if the submission agent is not the same agent who will be looking after the deal. This will allow underwriters to reach you quickly and easily if they have any questions while reviewing the file.

2. The Basics: Is the deal a purchase or a refinance? Is it a rush? Are your clients looking to pay out specific debts or do renovations? Will the property be owner occupied or rented? Providing a brief outline of the file in your notes can really help a deal take shape quickly for your underwriter.

3. Rates and Promotions: Are you looking for a special rate or a lender-specific program or promotion? Request it in your broker notes!

4. Potential Issues: Have you spotted something you think may cause a hiccup in your deal? Is it something that may need an explanation? Be sure to include the details in your notes. Broker notes provide an ideal forum to explain and mitigate any issues that may affect a deal.

5. Documentation: Do you have all your paperwork ready to submit?  Sending required documentation up front is a best-practice strategy in any case, but if you give your underwriter a list of what you’re able to send, they’ll know to expect it, and it will be added to the file with little to no delay.

Thorough broker notes show the underwriter that you have a good grasp of both the deal and what your clients are looking for, and they can make the underwriting process quicker and more efficient for everyone!

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 23-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.

Exit Strategies: Formulating a Plan for Refinancing

The day-to-day life at a mortgage brokerage can be fast paced, and sometimes even hectic. Once a last-minute purchase or urgent refinance is added to that mix, the pace can really take off.

Oftentimes, the focus in these situations is closing that last-minute mortgage without fully mapping out the next step.

Having a clear exit strategy can be a huge advantage for brokers, clients, and lenders alike.

Brokers

The clearest benefit in formulating an exit strategy, is garnering repeat business. Once the initial scramble is over, having a step-by-step plan for borrowers to follow will likely result in getting their file again when their initial mortgage is up for renewal.

Whether their challenge is bruised credit, thin credit, unusual income, or otherwise, a personalized plan to address the issue is ideal for connecting with clients, building trust in the broker-client relationship, and ensuring that they will return again and again.

Mentioning that an exit strategy has been discussed with clients also shows potential lenders that the application process has been thorough, and may lead to less questions during underwriting, resulting in a faster turnaround time for everyone!

Borrowers

An attractive interest rate is something most borrowers are seeking. If a short-term mortgage with a higher interest rate is called for, showing the borrowers how to move smoothly from that mortgage to one with a lower interest rate will result in real and obvious benefits for them in the future.

Discovering credit problems, especially at the last minute, can be both frightening and frustrating for clients. A plan outlining how to resolve the issues standing between borrowers and the best possible rate can lead to a smoother mortgage process both now and in the future.

Lenders

Knowing that a broker has discussed an exit strategy with a borrower can make the underwriting process more efficient. Including this information in notes can mean that less questions arise, and it may even give the underwriter more confidence in the file. Thorough notes with details of an exit strategy may lead to less back and forth, reducing that stressful waiting period between submission and file complete.

Writing the exit strategy down and providing a copy to the client while keeping a copy on file is key. Checking in periodically to see if progress is being made can also be really helpful in creating a win/win situation for everyone involved.

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 23-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.

5 Open-Ended Questions to Ask Your Clients

Client Interviewing tips 

Starting out as a new Mortgage Agent, there is a lot of new information to take in and new processes to get used to.  Learning how to conduct a thorough client interview and take a proper application is key to hitting the ground running.  Successful Mortgage Agents provide full, detailed applications and clearly demonstrate that they know their client.

How do you do that effectively?

Ask ‘open-ended’ questions.  Then listen, and take notes. 

Here are 5 basic questions to ask your client to help you gather the information you need:

Question 1: “Tell me about your credit history.”

Your follow-up questions should cover:

• How long they have had credit
• How they pay their credit, i.e. paying minimum payment or full balances
• Whether they have missed payments
• If they have co-signed any loans
• If they have had any collections, judgments, support payments, bankruptcies
• Whether they have filed/paid their income taxes and are they up to date on property taxes

Question 2: “Tell me about your income.”

Your follow-up questions should cover:

• All sources of income
• If they are self employed, how the business is set up, i.e. sole proprietorship or incorporated
• How long have they been at their current and previous jobs
• How stable and consistent is their income

Question 3: “Tell me about your property.”

Depending on whether it’s a new purchase or refinance, your follow-up questions should cover:

• What type of property is it, i.e. owner occupied, rental, mixed use
• How long have they lived there
• Any improvements they have done or improvements needed
• Unique features of the home
• Known negatives, e.g. previous fire or flood damage

Question 4: “Tell me about your future plans and goals.”

Your follow-up questions should cover:

• How long they intend to stay in their home
• Whether they expect lump sums of income, e.g. work bonuses, inheritance
• Any anticipated job changes
• Expected changes to family, e.g. newborn children or college costs

Question 5: “Tell me what’s important to you about your mortgage.”

Your follow-up questions should cover whether their priorities include:

• Flexible payment options
• Prepayment penalties
• Portable/assumable
• Lowest payment vs quickest payoff

An effective Mortgage Agent will take the time to have a thorough conversation with their clients, personalize the experience by asking the right questions, and then listen.  Once you have a complete picture of your client’s situation, you can readily place them with the lender with whom they have the best fit.

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 23-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.