FirstOntario Credit Union is hoping to give brokers an upper hand by providing market-leading mortgage rates to their clients
Brokers have been given an even greater responsibility in the wake of the coronavirus pandemic, as Canadians are looking for more ways to save money, increase cash flow and find some breathing room in this time of uncertainty. Interest rates are at historic lows and are likely to stay this way, making it a great time for people to consolidate their debt and refinance their mortgage.
In order to support brokers who are providing sound advice and solutions to their clients, FirstOntario Credit Union is looking to strengthen their lending portfolio by extending two great offers to current and potential member brokers. They are providing market-leading mortgage rates, not only on new purchases, but also for existing mortgage holders who may benefit from taking advantage of the equity in their home.
“Whether it’s for a renovation, a new swimming pool or to pay down on some high-priced debt, consolidating debt can help Canadians find extra cash,” said Dave Schurman, chief operating officer at FirstOntario. “In this time, job security is up in the air with many Canadians, so helping brokers help their clients is our goal.”
FirstOntario is currently offering a 5-year fixed-term mortgage special at 2.69%, with a minimum beacon credit score of 680 and 75% loan to value ratio (LTV). If you refinance or open a new mortgage by July 31, they are offering a discounted ‘quick’ close rate of 2.49%. Schurman says these competitive rates are being extended so brokers don’t have to use their commission to buy down rates.
In a controversial move, the Canada Mortgage and Housing Corporation (CMHC) recently tightened their lending guidelines for insured mortgages in response to the impact of coronavirus on the housing market. CMHC is predicting a 9% to 18% decrease in house prices over the next year. Schurman says FirstOntario can use CMHC if it fits, but also have access to Genworth and Canada Guaranty, which have both announced they will not be following suit on the changes.
“CMHC seems a little pessimistic on real estate prices, but that isn’t an industry-wide sentiment. We have the ability to use all three mortgage insurance companies depending on what the best fit is for the broker’s client,” said Schurman.
As brokers look for ways to stay connected to their clients during this new era of social distancing and online connectivity, it’s important for brokers to really dig deep to understand client concerns and goals. While some clients are rushing for the best rate, Schurman says all mortgages aren’t created equal and sometimes that best rate may come with conditions that are not well-suited.
“In some cases, it could result in someone not being able to take advantage of a refinance down the line because of huge penalties or restrictions,” he said. “A good broker often needs to think outside the box to put solutions together that’s best for the client. That's what brokers do best; they provide unbiased advice in terms of a lender and then provide the solutions.”
FirstOntario has been serving local mortgage brokers since they opened their mortgage broker department 10 years ago, but the credit union itself has been serving the community for over 80 years. Even amid the COVID-19 pandemic, Schurman says they are financially sound, very well capitalized and highly regulated. What sets them apart from banks is the fact that they are community-based, and company leaders live and work in the communities they serve.
“We really do have a finger on the pulse of our communities and have developed great relationship with brokers, who get to know our underwriters on a first name basis,” he said. “We aren’t in the business to just get the next mortgage. We want our brokers to be successful because we know if we help them to continue to be successful, they will continue to be loyal to us.”
