What is a Mortgage Broker? and How does a Mortgage Broker add value. When looking for a mortgage broker, you should look for someone who knows the area well, or even a current resident. You want an experienced professional who has experience investing in real estate and knows the ins and outs of the purchasing process. You want someone who has helped finance residential homes as well as large corporations and understands interest rates and the intricacies of lending money.
The real estate market is a continuously evolving industry, with changes in housing economics and real estate regulation becoming more common than ever. As these change, so does the mortgage broker – real estate agent relationship. It is important for real estate agents to understand how mortgage brokers can add value for their business as both the mortgage brokerage and real estate industries transform.
Mortgage Broker Real Estate Industry Expertise
With an abundance of real estate investing articles and reports sighting news sources, it can be difficult to find the reliable and accurate information needed to make a sound purchase decision. A Mortgage Broker seeks to help you navigate this process by providing sound expertise and guidance in securing your mortgage. For example, many prospective buyers would be surprised to know that the average home in Collingwood sold last year for $440,176. Although prices are on the rise, there is still ample opportunity to purchase a home in Collingwood. However, due to the attraction of the area, sales are increasing while the number of listings continues to decrease. As a result, any listing will only last approximately 41 days before it is purchased. People considering purchasing in the haven that is Collingwood should be ready to move quickly as there are many real estate opportunities before us. With that said, every prospective buyer should conduct the proper due diligence with regards to finding the most appropriate mortgage.
What is a Mortgage Broker?
There are a number of professionals out there whose job is to assist you in picking a mortgage product that best suits your needs. You need them – you can’t get a mortgage without one. A mortgage broker is a licensed professional who compares mortgages from a variety of lenders to find the best option for their clients. A mortgage broker is a kind of middle man between you and your lender. The Mortgage Broker basically works for you, the customer. The bank versus broker debate has gone on for ages, but the biggest difference really lies in the fact that a mortgage broker has relationships with many lenders, from conventional lenders like banks to alternative lenders such as private lender and Mortgage Financing Companies, and that they often have better access a number of lenders that you, as a member of the public, don’t. Smaller lenders, who don’t have the same overhead costs as big banks, often have cheaper rates and fewer fees. Mortgage brokers are also better able to arrange mortgages for those home-buyers who have extenuating circumstances that make a bank loan unrealistic. Many times a broker may get a better rate from your own bank than that bank will give you.
Working with Your Mortgage Broker
Prospective home- buyers are more informed than ever before about available mortgage rates and financing options. Home-buyers are also coming from an array of backgrounds, including New Canadians, Seniors, and the self-employed among many others. As the diversity of buyers increases, more customized and tailored services are required in both the specific home as well as the financing used to buy it. As a result, prospective buyers need mortgage brokers who can tend to their specific needs, and that have a solid understanding of both the Financing and Real Estate Market.
Over 43% of all mortgages in Canada are arranged by Mortgage Agents and Brokers, which is up from 33% in 2007. Additionally, 55% of first-time home-buyers are highly likely to use a mortgage broker. This demonstrates the increasing need for home-buyers to seek alternative or tailored financing for their specific situation. Having a positive personal relationship matters. A mortgage broker who builds relationships and who doesn’t just complete transactions is worth their weight in gold.
Mortgage brokers are well equipped to help a real estate agent’s client acquire the best financing available given their specific needs. Mortgage brokers can take care of all the financing issues and logistics of the mortgage, allowing the real estate agent to focus on the sale of the home and increasing their conversion ratio. This makes the real estate agent’s time more productive and allows them to focus on what they are best at.
The best mortgage brokers will also offer to co-market properties on social media, attend open houses or sales events, and complete other marketing initiatives as required to create a true win-win relationship. They should also be willing to collaborate on education, or more specifically, the co-creation of seminars and feature sheets focusing on a variety of financing and real estate topics. This would allow for co-branding and promotion of both businesses.
Access to a wide range of mortgage products and rates is increasingly important as we continue along a path of regulatory reform in Canada. If the home buyer shops with various financial institutions and banks they are offered mortgage and lending products only offered by that bank. Mortgage Brokers such as Mortgage Wellness have access to over 65 different lenders. New Home Buyers come from a wide background as previously mentioned in this article. Those people do not always have well established credit or readily verifiable income. Mortgage Brokers and Agents maintain relationships with many Private Lenders, Mortgage Investment Corporations and Provincially Regulated Trust Companies to name a few that are not subjected to the same scrutiny as Federally Regulated Financial Institutions. Without the assistance of an independent Mortgage Agent these options are not available to you or your clients.
Real Estate Agents need the support of a Mortgage Broker who is digitally well informed. There is no digital strategy, just a strategy in a digital world. Understanding the impact that social media has on our clients to being able to be digitally efficient are only some of the ways we are able to ensure the client’s needs are met in an expedient fashion. Mortgage Brokers who invest in technology, new media and innovation will be sought after as the Canadian Lending Environment continues to change. I believe the effects of peer to peer lending, crowdfunding for real estate and other innovations in private lending are not too distant in our future.
As an example, VERICO continues to innovate and add technology while enabling its brokerages to maintain strong identities and individual brands developing their own marketing and social media campaigns. I often ask the question “how many mortgage brokers use a secure website (https://) where they collect client information?” and the answer is often “not many”. Our job is to develop a mortgage application process with low “friction” so all partners including Real Estate Agents, Appraisers, Inspectors, Lawyers and Lenders will benefit.
You can be assured that Gerard will treat your Mortgage and Real Estate Decision like it is his own.
Please Call Gerard at 866-496-4028 for a complementary consultation.