A Broker's Life

Michael Hallett • Oct 27, 2015
What you think I do and What I really do!
 
The primary purpose for producing this piece was to try and demystify the job of a Mortgage Broker. By now everybody that has a mortgage has heard about Mortgage Brokers. Whether they have decided to use the services of one is a completely different topic all together. Having said that, the market share of borrowers 'using their banks' still swings in their favour at a staggering 70%. I'm excited to be part of the push for equal or greater market share...but let's get back to the topic at hand.

This idea came to me while I was speaking to a colleague of mine about a recent file she was working on. It was a difficult one with multiple layers and barriers to mitigate before a lender would accept it. In the end, she got the 'file complete' status that we as Brokers all seek. At the end of the process the client was very grateful, but admittedly said that he was really unsure what she as a Mortgage Broker really does. This is where the idea was born.

What Do You Think I Do?

Here's what a quick Facebook poll unveiled after posing this question, In my quest to write fun and sometimes 'different' mortgage content for my blog I want to ask my NON-mortgage broker friends on Facebook a simple question. What do you think I do? Everybody has a different opinion of what Brokers really do. I knew there would be some fun jabs, but here is what was sourced.

  • You lay with your feet up on the couch watching sports all day...answering the phone when it rings.
  • You sit around, drink coffee, wait for the files to roll in then hit the pub for afternoon drinks...
  • Laundry, cleaning, cooking, napping
  • Match potential homebuyers with the mortgage product that best fits their needs. And you do this by knowing what your customers wants/needs are and being aware of what programs are available and which company offers them.
  • A fellow broker replied with an image, which I felt was very appropriate. It was the Dos Equis XXX actor with a caption that read "I don't always make it rain, but when I do, it's usually rolls of quarters." Some friends think I sell cash.
  • Broker on Wall Street juggling multiple phones on-the-go!

Further to the crowd-based outsourcing, I also found another image online that made me chuckle and thought it was appropriate for this piece as well. I summarized the image into 4 points below. As individuals we all have our own sphere, people that we look up to and depend on, whether it's for advice or friendship. All of those individuals have opinions. And the more I thought about the graphic I found, the more it made sense as I've had these very conversations with these people in my life as to what I do.

  • My friends think all I do is go from one party to the next trying to drum up business.
  • My mom still thinks I work on cases (no, I'm not a lawyer) sitting in a boardroom having cerebral conversations with other high level executives.
  • The general public thinks I am a slippery car salesman wearing 70s clothes and a pinky ring while dangling a cigar from my month.
  • My clients (might) think that all I do each day is sit back and calculate my future commission cheques.
What I Really Do!

Mortgage Brokering is the career path I chose six years ago. At the time I made the decision to pursue Brokering I thought it was a job. I know now that is an incorrect statement, it's a lifestyle that I live. It's not a regular 9AM-5PM-Monday-to-Friday-with-5-weeks-of-vacation-and-employer-double-up-RRSP-contributions-a-year-job. It's much more complex than that. For starters, I have to be 'on' and engaging all the time. I don't power down because the moment I do I could miss an opportunity and opportunities don't always come around in the same shape. I have a duty to my next client to be:

  • up-to-date on all the current real estate market data,
  • changing lender interest rates (and why),
  • economic influencers that trigger the market,
  • constantly changing lender guidelines,
  • know how to structure a file when it lands on my desk, quickly and efficiently.

Right now I'm fairly certain that all my Broker friends are nodding their heads agreeing with me.

Creating an exceptional experience for that one client could mean one or more referrals from that very client in the future. A referral is the ultimate testimonial. Each client is treated like they are the only one I am working with at that present time.

As Mortgage Brokers we all operate our business differently. I have chosen a business model where most of my business flows from professional referral sources; accountants, financial planners, lawyers, Realtors, bank representatives, property managers, stock brokers, developers, professional recruiters, home insurance providers,  commercial brokers and so on. These professionals are key to my success as I have positioned myself as a resource. One that can assist with every aspect of a mortgage transaction and beyond. I am able to connect people.  They are all people I share a common thread with - we KNOW, LIKE and TRUST one another. This is the basis for a natural flow of referrals. You're likely asking yourself, why am I bringing this up. The answer is because this is what 'I DO.' I get to know the people I work with on a personal level to form a friendship. If there is no friendship, just personal monetary gain, then there will not be a long lasting business relationship. I have seen a couple of referral sources come and go over the years where personal gain was the only thing top of mind for the other party, needless to say we are not working together anymore. The act of getting to know someone is quite simple, just ask questions then sit back and listen. Then take that information and store it, I guarantee you it will become very handy in the future.
An exceptional Mortgage Broker is also an exceptional story teller. All my clients have their own unique individual story and it's up to me to tell that story to the audience - the potential lender we are pursuing. The ultimate goal throughout the application process is simple, minimize the stress level of the borrower and complete the task quickly with comprehensive updates along the way. This is done by structuring the file accordingly, providing detail. I must admit I've got the process dialed. It's so good, that I have quite honestly surprised myself a few times on a few difficult files. I put a lot of pressure on myself to tell a seamless story.

Providing an abundance of detail helps to break down the barriers of entry, this being access to the lenders financing. My goal at the start of the application process  is to receive an approval without receiving a call or an email from the lenders underwriter. When I accomplish that, then I have done my job successfully. It's quite simply the easiest part of the process. All I have to do is answer questions about the property, income source, down payment source and credit history - just 4 things!

All lenders have a different appetite for risk, knowing how to mitigate and answer those risk questions is all part of managing this business. Once this is all tabulated then the financing is guaranteed, right? One would assume (never assume...you know the rhyme) that 'a mortgage is a mortgage,' WRONG! Every mortgage file is different. In my short 6 year tenure, I've never seen one file that is exactly the same as a previous one. There are definitely elements of one that might be similar, but this business does not have a template. The round hole, square peg scenario happens a lot in this business. It's up to me to shave down the edges of the square peg to squeeze it into the round hole. There are definitely ones that come together easier than others, but there are also files that consume my day, even multiple days. Again, I can sense my Broker friends nodding their heads.

The most important role 'I do' through the application process is to assume the position of an Educator. I entered this business knowing that I wanted to learn from my mistakes in the past. As a first time mortgage consumer I had relied on my bank to advise me accordingly and to educate me and to help me make the right decision. Instead I got what would work best for the banks shareholders. Knowing what I know now I don't think they did their job. I should have done my own research and ask the right questions. I learned the hard way. From day 1 (August 30, 2009) I vowed to provide as much information to my clients as needed to help them make an informed and educated decision. One that would benefit them and their family, not the lender. Knowing that my clients are advised correctly provides me the confidence in knowing they will instruct me on the path they would like to follow.

Processing mortgage files is just a half of what I do. Of course the other side is marketing. How does the rhyme go? - 'you gotta spend money to make money.' To generate business or potential clients I have to get out and meet with as many people as possible and let them know what I do. I try to attend as many networking events as a I possibly can. Heck, I even attend industry functions and conferences as you never know when a Broker-to-Broker conversation will lead to placing the 'next' file or an unforeseen opportunity. The glamorous life of a broker also involves endless coffee meetings and luncheons along with relentless periods of time spent on the phone with clients and lenders. I am constantly building the fortress around me. I have made a conscious effort to always utilize the same suppliers; lender(s), lawyer, appraiser. By maintaining focus on a select few it sometimes can pay in spades. At times this business presents strict or short timelines where having a solid relationship is key. If I need to place a rush on a file or ask for an exception or need some legal advice I know I have someone that I can rely on. If not, these calls usually end with 'sorry I'm too busy..' or 'who is this..' or a flat out 'no.' It's not what you know, but who you know in this small world of Brokering. Building solid reliable relationships is vital for survival is this business.
So, what do I do as a Mortgage Broker?

I strive to build long lasting relationships with my referral partners, clients and providers. I structure intricate applications by telling detailed stories about ones past, present and future. I am dedicated to providing the best options to fit one's current lifestyle and future long term goals through education. I share ideas and experiences about my mortgage practice, what has worked and what has not. I am continuously planting seeds like a farmer, never knowing when I will be called on. I work for the client, not the lender. What do I really do?

I am a connector! I connect my clients with the correct financing as well as connecting them with other real estate related professionals.

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MICHAEL HALLETT
Mortgage Broker

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The Property Matters in Mortgage Financing

By Michael Hallett • 08 May, 2024
When looking to qualify for a mortgage, typically, a lender will want to review four areas of your mortgage application: income, credit, downpayment/equity and the property itself. Assuming you have a great job, excellent credit, and sufficient money in the bank to qualify for a mortgage, if the property you’re looking to purchase isn’t in good condition, if you don't have a plan, you might get some pushback from the lender. The property matters to the lender because they hold it as collateral if you default on your mortgage. As such, you can expect that a lender will make every effort to ensure that any property they finance is in good repair. Because in the rare case that you happen to default on your mortgage, they want to know that if they have to repossess, they can sell the property quickly and recoup their money. So when assessing the property as part of any mortgage transaction, an appraisal is always required to establish value. If your mortgage requires default mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty, they’ll likely use an automated system to appraise the property where the assessment happens online. A physical appraisal is required for conventional mortgage applications, which means an appraiser will assess the property on-site. So why is this important to know? Well, because even if you have a great job, excellent credit, and money in the bank, you shouldn’t assume that you’ll be guaranteed mortgage financing. A preapproval can only take you so far. Once the mortgage process has started, the lender will always assess the property you’re looking to purchase. Understanding this ahead of time prevents misunderstandings and will bring clarity to the mortgage process. Practically applied, if you’re attempting to buy a property in a hot housing market and you go in with an offer without a condition of financing, once the appraisal is complete, if the lender isn’t satisfied with the state or value of the property, you could lose your deposit. Now, what happens if you’d like to purchase a property that isn’t in the best condition? Being proactive includes knowing that there is a purchase plus improvements program that can allow you to buy a property and include some of the cost of the renovations in the mortgage. It’s not as simple as just increasing the mortgage amount and then getting the work done, there’s a process to follow, but it’s very doable. So if you have any questions about financing your next property or potentially using a purchase plus improvements to buy a property that needs a little work, please connect anytime. It would be a pleasure to walk you through the process.

Getting a Mortgage While on Parental Leave

By Michael Hallett • 01 May, 2024
Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations! If you’ve thought now is the time to find a new property to accommodate your growing family, but you’re unsure how your parental leave will impact your ability to get a mortgage, you’ve come to the right place! Here’s how it works. When you work with an independent mortgage professional, it won’t be a problem to qualify your income on a mortgage application while on parental leave, as long as you have documentation proving that you have guaranteed employment when you return to work. A word of caution, if you walk into your local bank to look for a mortgage and you disclose that you’re currently collecting parental leave, there’s a chance they’ll only allow you to use that income to qualify. This reduction in income isn’t ideal because at 55% of your previous income up to $595/week, you won’t be eligible to borrow as much, limiting your options. The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income. To qualify, you’ll need an employment letter from your current employer that states the following: Your employer’s name preferably on the company letterhead Your position Your initial start date to ensure you’ve passed any probationary period Your scheduled return to work date Your guaranteed salary For a lender to feel confident about your ability to cover your mortgage payments, they want to see that you have a position waiting for you once your parental leave is over. You might also be required to provide a history of your income for the past couple of years, but that is typical of mortgage financing. Whether you intend to return to work after your parental leave is over or not, once the mortgage is in place, what you decide to do is entirely up to you. Mortgage qualification requires only that you have a position waiting for you. If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.
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