Top lending executive on the best steps for getting deals approved
It’s one of the most crucial elements of helping borrowers navigate the mortgage market: the broker-lender relationship, an essential partnership for the success of all parties throughout the mortgage process.
For brokers, identifying a lender that’s responsive, efficient and agile in finding solutions for their client is an utmost priority, while lenders rely on clear and detailed communication from brokers to ensure they have as much information about a prospective deal as possible.
Asking the right questions of their client prior to submitting the application is one of the most vital steps a broker can take when dealing with lenders, according to Community Trust’s head, mortgage originations, Grant Armstrong (pictured top).
The alt-lending executive told Canadian Mortgage Professional that while some brokers might feel their clients want a low-hassle mortgage process, and therefore avoid asking those searching questions, the most successful brokers are as thorough as possible with clients before sending the deal through.
“The brokers that we see that are really doing those interviews [with clients] are getting the virtual application and then getting on a phone or Zoom or Google Meet,” he said. “They’re interviewing their clients and asking, ‘Where’s the money coming from? Who’s going to live in the house? How do you want to use it?’ And they’re learning to find all these unique nuances that make the brokers better.”
That process also helps brokers pre-emptively address any “glaring questions” lenders might have about the application, ranging from where the downpayment is coming from to the status of the other property.
The best applications to come across a lender’s desk, Armstrong said, “are so crisp that the underwriter could say, ‘I’ve got everything I need here. Approved, and let’s go on to the next transaction.’”
Simply taking a transactional approach and trying to rush through the deal as quickly as possible from beginning to end won’t suffice, he added. “It’s something I’ve said many times: Get to know your client really well. Ask them everything that you need to know. Don’t assume anything – and then present the application the best way.”
October saw a 7.7% rise in Canadian home resales, driven by interest rate cuts. However, George Hugh, CEO of Taurus Mortgage Capital, warns brokers not to expect a market boom in 2025.https://t.co/rS1MF48U3u#Mortgage #HousingMarket #CanadaHousing
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 21, 2024
Brokers, lenders setting sights on a busy year ahead
A brisk housing market may be in the cards for 2025, with a recent upswing in purchase activity and interest rates on a steady descent during the past few months.
October saw home sales hit their highest level for more than two years, jumping by 7.7% compared with the previous month, according to the Canadian Real Estate Association (CREA).
Optimism is growing about a busy market in the coming 12 months – but brokers have had to withstand plenty of challenges in recent years, from a protracted cooldown after the COVID-19 pandemic, to a host of regulatory changes constantly keeping them on their toes.
Changes introduced by the government this year include the removal of the stress test requirement for uninsured mortgage switches at renewal, which came into effect last week, and the impending mortgage insurability cap hike and expanded amortizations.
For Armstrong, a maxim learned from a colleague years ago has stood the test of time: Get comfortable with being uncomfortable.
“There are lots of changes,” he said. “If you look at this year alone, there are three to four regulatory changes by the government. I would suspect that there’s more [on the way]. Lenders are different. Housing hasn’t been stable.”
Patient and methodical approach the best way forward for brokers
Against that backdrop, cultivating as strong a relationship as possible with borrowers and lenders alike will stand brokers in good stead as they gear up for a busier market in 2025 – and patience is the name of the game.
“Just take your time,” Armstrong said. “There’s a lot of applications out there and I know a lot of people feel that they have to go quick.
“Take your time. Get to know your BDM really well. Buy them a cup of coffee. Our BDMs know the tips, tricks, and niches, and the best way to get deals approved is by using the system and the processes and the guidelines. Get to know them and invest in that relationship.”
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