Mortgage Brokers Southwestern Ontario

Magenta Answers Broker Questions About B20

The new B20 guidelines are set to come into effect on January 1, 2018.  It is essential for Mortgage Brokers to understand lenders and their niches, and what impact these changes will have.  Accordingly, we have compiled Brokers’ most commonly-asked questions to help you understand Magenta’s lending posture.

Will borrowers have to re-qualify at renewal?
Magenta has always been a short-term lender and will continue to offer short-term loans.  We have always re-qualified mortgages based on payment history and current lending posture, with the goal to move borrowers back to the federally regulated space.

How will it affect your income-verification process?
Magenta has always had a rigorous income-verification process; however, our underwriters are encouraged to apply judgement to each file, and are well versed in identifying and verifying alternative sources of income.

Will Magenta be affected by the restrictions on co-lending and bundled mortgage products?
Although Magenta has previously participated in bundled products, we have always offered our standalone second mortgage product.  We anticipate our second mortgages becoming more popular in 2018.

Will the loan-to-value limits be affected?
Magenta continually evaluates and reviews its LTV posture, and we do not foresee any changes at this time.

Will Magenta still be able to cap their fees?
Yes, this is a key feature of our product offering.

Will the minimum qualification rate (stress test) affect Magenta’s rates?
Although federally regulated financial institutions will be required to qualify clients at the greater of their contract rate plus 2%, or the Bank of Canada posted 5-year rate, this is not the case for Magenta.  We will continue to lend to our clients at our contract rate.  In most cases, this will be equal to, or less than, the qualifying FRFI’s rates.  Our servicing ratios have already taken this rate into consideration.

At Magenta, our goal is to support our Broker Partners during these changes, as well as, help as many people as possible to achieve their home ownership goals.

To find out more about B20, call us at (613) 230-5014.

Register for Magenta’s back-end portal to access useful tools and forms today!

For more information, please visit Magentacapital.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.

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!

Register for Magenta’s back-end portal to access useful tools and forms today!

 

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 long 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 Magentacapital.ca.

The Mortgage Renewal Process: What to Expect During the Mortgage Renewal Process

The maturity date of your mortgage is fast approaching. The maturity of your mortgage gives you an opportunity to review your financial situation and make some decisions based on your financial goals and current situation.

If you discussed an exit strategy with your mortgage broker, you may be preparing to refinance with a new lender at a lower rate. If it suits your needs to renew your current mortgage, here are a few things to keep in mind both before and during the process:

Here are some tips to prepare for your renewal.

1. Ensure your account is current: If your mortgage account has fallen behind, make arrangements to bring it back into good standing. Work with your lender to find a solution that suits everyone.  Small changes, such as moving your monthly payment to a new day, can make a difference.

2. Keep your home insurance in good standing: If your insurer has changed since you originally obtained your mortgage, make sure you let your lender know!

3. Keep the home in a good state of repair with no deferred maintenance: Don’t put off those home maintenance projects, big or small. Touch up the paint. Mow the lawn. Make sure the roof, furnace, and electrical wiring are in good repair.

What to expect at renewal.

1. Renewal Options: Your renewal options will be sent to you in advance of the maturity date. Review the options you have been offered. You may wish to discuss your options with your bank or mortgage broker.

2. ‘Business-for-Self’ Income: If you are ‘business for self’ or have ownership in a business, you may be asked to provide confirmation that HST and Source Deductions are being remitted to Revenue Canada.

3. Second Mortgages: If you have a second mortgage you may be asked to provide a current first mortgage statement. Most lenders will either send these out annually, or provide a way for you to access the information on their website or via online banking.

4. Income Verification: You may be asked for updated income verification. Gather or print your two most recent pay stubs, just in case you need them.

5. Appraisals: You may be asked for a new home appraisal. Appraisals always make note of any instances of deferred maintenance that are noted during the inspection. This is why keeping on top of projects around your home is so important.

Following these tips can ensure your mortgage renewal goes as smoothly as possible.

Register for Magenta’s back-end portal to access useful tools and forms today!

 

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 long 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 Magentacapital.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 long 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 Magentacapital.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.

 

Register for Magenta’s back-end portal to access useful tools and forms today!

 

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 long 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 Magentacapital.ca.

How to Accelerate the Deal Submission Process

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.  It can feel like you’re spinning.

How many times have you been in this situation?

There’s a simple solution to minimize this back and forth on the deal submission process:  call your lender BDM before you submit your deal.

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.  Now, take all that time you’re saving and drum up new business for your pipeline!

 

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 long 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 Magentacapital.ca.