In every mortgage I have brokered there is a moment when my client says to me in one way or another, “Why does the bank need that?” and, in every case the answer has either been ‘Risk Management’ or ‘Regulation’
And strangely it is the first one that has great effect on the rate. In other words, if the answer is ‘Regulation’ you will find one mortgage quite similar to other mortgages, all other criteria being equal. But when the answer is ‘Risk Management’ then you can directly connect the amount of risk management documentation required to the amount the mortgage rate is set to.
An ‘A’ lender’s risk management requirements are often seen as onerous, but it is this very risk mitigation documentation that allows an A lender to offer a better rate than some alternate lenders you may have heard advertised. The easier it is to get a mortgage, the higher the rate is pretty much an axiom.
This is where a borrower really needs a mortgage professional. It is in the sometimes convoluted risk management policies where the ‘perfect fit’ mortgage can be found. Borrowers who are self employed, going through a separation, down sizing, up sizing, incorporated, income property, estate planning, recreation, 2nd home etc…… lenders and borrowers have specific needs for their ‘best mortgage’. When a borrower discusses their mortgage needs with a mortgage professional it does not take long to distill the required features of the borrower’s ideal mortgage. It is knowing what lender and what compromises will best meet the borrower’s needs that the value of the mortgage professional becomes readily apparent.
By having a good working knowledge of the mortgage products offered by each lender and their individual risk management requirements, a Mortgage Professional can zero in on the lender(s) most likely to have a product that best meets matches the borrower’s ideal mortgage. The added bonus is that the professional also knows the unique process by which a mortgage is submitted for at each lender as well as the followup process leading to the closing of the mortgage. That is why mortgage brokers can provide their services to the borrower for free. The lenders appreciate the efficiency of only having mortgages submitted to them that have already been vetted to match one of their specific mortgage products and show that appreciation by compensating the broker.
A mortgage professional may also provide referrals and recommendations for many of the other services a borrower needs. From home and default insurance to legal and financial advisers, a mortgage professional will have dealt with many of them and will have developed opinions on which might have the most experience with the borrower’s mortgage profile. No cost, no obligation. Why wouldn’t you deal with a mortgage professional?
Introductions to people like you are the backbone of my business. Please let your friends, family and coworkers know I am available to help them with their mortgage needsâ€‹. I appreciate your support, and your referrals will too!