Don't balk at 7% rates while paying 23% on a credit card, broker tells clients
Mario Nevarez Jr. (pictured), broker/owner at Arizona-based Clear to Close Mortgage likes to keep it real.
Formerly in retail, Nevarez switched over to wholesale just a couple of years ago. Despite marked differences between the two spaces, Nevarez said he was able to transition rather smoothly. “The interesting part of going from a retail giant to a smaller brokerage is you might not have all the tools or advertising budget. But the wholesale lenders are now catching up on the marketing piece, so we’re about even now. The only difference is how you present it, and how you present it is lower costs, lower fees for the consumer – not for me, for the consumer.”
He alluded to the collegiality that can be found in the broker channel for those just entering it. “If they say ‘I don’t have a training manager’. ‘Yes, you do, call one of us.’” Nevarez had worked for New American Funding, where he benefited from a trio of mentors. “You can learn a lot from both sides,” he said. “It’s how you apply it.”
But back to him keeping it real – an attribute aided by his status as a homebuyer’s education instructor status. He related how his father bought the family home at 17% interest, and rates in the 80s and 90s were also in double digits. “A lot of folks see 7.5% and think it’s too high. I say ‘so tell me about your credit card at 23%’. And they go: ‘Whoa.’ They say rates are too high, I say: ‘You have a $4,000 purse, but you’re asking for down payment assistance. There’s an issue there. Your financial management needs to be adjusted a bit.’”
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He keeps it real all day: “I show them what the cost is,” he said of his customers. “I break down every rate and tell them bring me an LE [loan estimate] from a competitor; I want to look at it. I highlight ‘this is what we charge, this is what they charge – apples to apples’. It’s not a specialty product, just apples to apples. This is what we do, and we get a great response from it. You have to be very real with customers. A lot of it is financial coaching and being transparent with them.”
Mortgage Professional America ran into Nevarez at the recent Fuse conference, the fifth iteration of the annual gathering for Association of Independent Mortgage Experts (AIME) that was staged in Las Vegas from Sept 29-Oct. 1. The broker was spotlighted by AIME as a recipient of the group’s Spark small business grant last year.
Given the collegial nature of the channel, Nevarez offered advice to those who may just be entering the space unaccustomed to a rising rate environment as the Fed attempts to manage inflation. “Rates are going to be the rates,” he said. “We can’t control them, obviously. But what we can do is educate our customers and be consistent. Once we educate, that’s the key piece. You have to grind it out. Sorry, it’s not ’19, it’s not ’20, it’s not ’21. Loans were falling in your lap, and you couldn’t keep up. Now you have to put effort in your work - but this is where you show your skill set. And this is what we’re seeing – a lot of originators exiting the market because they wanted that easy money.”
Nevarez offered high praise for AIME because of what the association has done for him both personally and professionally. “AIME for me has been a blessing,” he said. “Obviously, being a grant recipient, having the power to network with powerhouse individuals – being mentored by them – has given me a different aspect of leadership that I didn’t have. It’s brought it back out. I come from a military background, I’m a veteran. You kind of put that aside sometimes because it’s not useful in the regular world. But coming back to the broker world, AIME has brought it back out.”
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He now sits on the Spark committee as vice president of the very grant program from which he benefited one year ago. “Paying it forward is big for me,” he said. “And when AIME asked me for help, I said I’m in 100% because it’s allowed me to build my business, grow my business and continue to grow it. And now I can mentor, coach and influence the next grant recipients and brokers who are coming in.”
Clearly, keeping it real has its rewards.
