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
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.
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 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, 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.
Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, visit www.magentacapital.ca.
The day-to-day life at a mortgage brokerage can be fast paced at the best of times. Once a last-minute purchase or urgent refinance is added to that mix, the pace can threaten to become hectic. Oftentimes, it is tempting in these situations to close that last-minute mortgage without fully mapping
The day-to-day life at a mortgage brokerage can be fast paced at the best of times. Once a last-minute purchase or urgent refinance is added to that mix, the pace can threaten to become hectic.
Oftentimes, it is tempting in these situations to close that last-minute mortgage without fully mapping out the next step. However, in the long run, flying by the seat of your pants is doing yourself a disservice.
Having a clear exit strategy can be a huge advantage for brokers, clients, and lenders alike.
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. It also builds trust in the broker-client relationship, ensuring that they will return again and again.
Mentioning that an exit strategy has been discussed with clients shows potential lenders that the application process has been thorough. This may lead to less questions during underwriting, resulting in a faster turnaround time for everyone.
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.
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 is helpful in creating a win/win situation for everyone involved.
Register for Magenta’s back-end portal to access useful tools and forms today!
Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, visit www.magentacapital.ca.
In addition to obtaining advice from your financial advisor, performing your own due diligence is a first step to investing. Beyond the Mortgage Investment Corporation’s (MIC) own publicly available information, it’s prudent to look at external, unbiased sources of information to get a clear view of where exactly you are
In addition to obtaining advice from your financial advisor, performing your own due diligence is a first step to investing. Beyond the Mortgage Investment Corporation’s (MIC) own publicly available information, it’s prudent to look at external, unbiased sources of information to get a clear view of where exactly you are putting your hard-earned capital.
In our previous post, Investor Tips: Selecting the Right MIC, we focused primarily on information that the particular MIC provided: offering memoranda, subscription agreements and associated fees, liquidity, portfolio composition, how dividends are distributed, frequency and transparency in reporting to shareholders, etc. With that context in mind, this entry looks at building a more complete picture of your potential investment by looking at external sources of information.
Without further ado, here are some great places to gather information and properly vet a MIC:
First off, CMHC has a superb collection of data that is regularly updated and analysed by leading economists. Of particular interest to investors is the Housing Market Information section of the website: included are data sets and reports that range in scope from the national housing market to more local housing markets to even more granular neighbourhood details. You can use the information here to evaluate the MIC’s lending policies against your own appetite for risk. For example, you notice that a sizable chunk of the MIC’s portfolio is allocated to higher risk rural properties. Then, using CMHC’s data sets, you can see that the market outlook for these regions is not ideal. While the potential return is high, you decide it isn’t worth the risk and continue your search.
CMHC’s housing portal is an invaluable resource used at all levels of the industry. Best of all? It’s free.
Try using a keyword search with Google’s handy News filter to get a feel for how the housing market you are interested in is performing. For example, “Ottawa Housing Market” pulls up plenty of relevant articles from reputable sources. Furthermore, ou can even set a custom Time filter via search tools to focus your research on a specific time period. While National publications such as the Financial Post or The Globe and Mail do a fantastic job of covering broad housing market news, they are inherently focused on only the big stories (read: major urban centres such as Toronto, Vancouver, and Montreal). It’s important to go to local sources for specific details on a given market.
While slightly less focused than CMHC’s or CREA’s analysis, Stats Canada has a breadth of information on housing and other indicators of economic growth to help inform your decision. Pro tip: use Google to search for region specific data sets. StatsCan’s website is notoriously difficult to navigate.
Websites such as Mortgage Broker News and Canadian Mortgage Trends offer a lot of insight into how professionals in the industry are reacting to industry changes and new MIC products.
CREA provides monthly updates on home sales and home prices for a given housing market. Once you’ve navigated to their statistics page, select the community you want to research and a report for the previous month will appear. Along with the tools above, this creates a detailed picture of where a potential MIC would be lending your capital.
These are just a few resources to help jumpstart your own research. Ultimately, the basis for any investment decision needs to be rooted in a methodical approach to understanding an investment product.
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Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, visit www.magentacapital.ca.
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
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?
Here are 5 basic questions to ask your client to help you gather the information you need:
Question 1: “How’s your credit history?”
Your follow-up questions should cover:
Question 2: “What’s your income like?”
Your follow-up questions should cover:
Depending on whether it’s a new purchase or refinance, your follow-up questions should cover:
Question 4: “What are your future plans and goals?”
Your follow-up questions should cover:
Question 5: “What’s important to you about your mortgage?”
Your follow-up questions should cover whether their priorities include:
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.
Register for Magenta’s back-end portal to access useful tools and forms today!
Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, visit www.magentacapital.ca.
You’ve met with your client. You’ve done a thorough job of asking open-ended questions, probing for explanations, and understanding any unique challenges of their situation. You write up the deal, select your lender and press submit. And then you wait…and your client waits… Finally, your lender comes back to you
You’ve met with your client. You’ve done a thorough job of asking open-ended questions, probing for explanations, and understanding any unique challenges of their situation. You write up the deal, select your lender and press submit.
And then you wait…and your client waits…
Finally, your lender comes back to you with questions and you’ve got to go back to your client for more information. Your client is starting to get impatient; they want the house and they’re anxious to get the process moving.
What’s more, you’ve got multiple deals on the go that are requiring that same back and forth. You’re busier than ever and things are not moving forward fast enough. You’re spinning your wheels, but you can’t find any traction.
How many times have you been in this situation?
By first discussing the file with your lender BDM, you will obtain key information and answers that create the most efficient path to a viable solution for your client. Each lender has a unique posture in the marketplace, with differing requirements for credit, documentation, property types, and lending areas.
Knowing the nuances in advance will reduce the back and forth, enhancing your service levels and positioning yourself as true expert in the mortgage space.
Here are key points you’ll want to discuss with your lender BDM:
1. Communicate the areas where you think there might be hiccups. Being transparent from the outset will allow you to share your ideas and understand what options are available, allowing you to take a consultative approach with your client.
2. Understand any potential gaps the lender might be concerned about. You will learn of any additional information or documents your client may need to provide. It will also prepare you to explain to the client why the additional documentation is required.
3. Outline your client’s goals and establish a clear understanding of the lending guidelines to ensure this deal is the best solution for your client (and not just the best you can do with that particular lender).
4. Ask for feedback and guidance on structuring the file. Lender BDMs are knowledgeable and willing to help. They also want the process to go as smoothly and efficiently as possible.
Adding a quick 5-minute phone call to your lender BDM to your sales process could save you exponentially more time! Your efficiency and knowledge will create a strong working relationship with your clients and lead to referrals. Don’t forget that your lender may have specific platforms to help you submit your files and track their status, such as Magenta’s own broker portal. , These tools can streamline the process further and take the guesswork out of submission. Now, take all that time you’re saving and drum up new business for your pipeline!
Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, visit www.magentacapital.ca.
In the process of interviewing a client, you’ve discovered some challenges with their application. You recognize that something about the application either doesn’t add up or requires further questions and investigation. But what does that look like? It’s not uncommon for mortgage brokers to struggle with asking the hard questions.
In the process of interviewing a client, you’ve discovered some challenges with their application. You recognize that something about the application either doesn’t add up or requires further questions and investigation. But what does that look like?
It’s not uncommon for mortgage brokers to struggle with asking the hard questions. Even experienced agents can feel uncomfortable asking hard questions and delving deep into their clients’ background and personal history. They recognize the need to get more detail but also feel their questions are intrusive or confrontational. They don’t want to offend their client or put them on the spot by asking tough questions that could make them defensive. The reality is that this is the exact information you need to get the best possible deal for your borrower.
As a mortgage professional you should explain that your job requires that you understand the root cause of their challenges, you are completely non-judgmental about their circumstances, and that their information will be held in confidence. Explain that this is how you will ultimately get them the best mortgage suited for their situation and future goals.
What are some typical ‘hard questions’ that you may have to ask your borrower?
Here are questions that can help you position your client to the correct lender the first time:
Bankruptcy is a very difficult decision for those who have had to experience it and it’s usually the end result of a very difficult period in someone’s life. The circumstances leading to this outcome are important to know because it allows the underwriter to make a determination as to whether those same problems are likely to re-occur.
Rapid and frequent job changes could be a sign of your borrower taking advantage of better opportunities, or a sign that he/she cannot hold a job. Understanding the reasons for the job changes and knowing how long the periods of unemployment were between them is a key part of the underwriter’s review
Most people feel that their home is their castle and they tend to over-value the property and under-estimate the negatives associated with it. Many lenders put significant weight on the quality of the property when determining if they want to lend on it. Talk to your borrower about what challenges the property might present so that they can be addressed early on in the process. Some examples might be related to it’s condition, location, visual appeal, upkeep, unique features (indoor swimming pool) previous insurance claims, etc.
Most lenders require property taxes and income taxes to be paid up to date prior to funding a new mortgage, so discovering this late in the process can potentially bring the deal to a hard stop. Even if the borrower’s credit is immaculate, ask this question early in the process and then ask for proof. Bring the deal to a hard stop.
You need to understand your borrower’s legal marital status because a borrower who is recently separated or divorced may be required to provide additional documentation, such as a separation agreement or independent legal advice from their ex-spouse. It’s important to know up front what you are dealing with and the level of co-operation that a separated applicant is expecting from their ex. Non-co-operative ex-partners sometimes have the power to derail a mortgage application.
Arrears on one single trade line that appear on an otherwise strong credit bureau report always seem out of place to an underwriter. It’s important to have the explanation as to why that account is behind. Was it forgetfulness? Is there a dispute with the credit provider? Is this a shared or co-signed account? Or perhaps this is an early indication of larger financial problem that is just beginning to surface. As a rule, it’s best to ask for an explanation for all trade lines that are currently R2 or worse, or past trade lines that are R3 or worse . Don’t ignore past arrears. Just because everything is current today does not eliminate the need to explain what happened in the past. Underwriters want to know if this is reoccurring or simply a blip.
Once you’ve asked the tough questions, ensure that you document the explanation and then don’t be afraid to ask for verification from the borrower. You should anticipate that the underwriter will ask for this, so be up front in disclosing it, explaining it and verifying it.
Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, visit www.magentacapital.ca.