Mr./Mrs. Perfect Broker



perfect-mortgage-broker Someday we’ll retire, (God only knows when), and we might find ourselves in need of a mortgage.

Hopefully, we’ll be playing so much golf that we won’t have time to keep up on the mortgage market. So, we’ll need to track down a good mortgage planner.

But what would we, as mortgage planners, seek out in a mortgage planner?  We asked ourselves that, and came up with these top 10 criteria.

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Our certain someone would:

  1. Be licensed in the industry over two years
    • Experience is so crucial in this business. It just avoids so many headaches. New brokers are very eager to please, but if a newbie is going to make a mistake, better that it be on someone else’s file.
  2. Have closed at least $10 million of mortgages in the last 12 months
    • Tenure alone doesn’t afford experience. Deal volume does.
  3. Have “status” at a minimum of three lenders
    • For better pricing and faster lender turnaround
  4. Know the pros and cons of major mortgage products outside the broker channel (like those from RBC, BMO, and Manulife).
    • So they can advise us objectively.
  5. Reply to emails in 8 business hours
    • Who’s got time to wait?
  6. Return phone calls the same day
    • Ditto
  7. Have a decent professional web presence
    • Brokers who take pride in their marketing are usually fairly competent in other parts of their business
  8. Diversify their deal submissions
    • And not send over 40-50% of their volume to any one lender. Otherwise, their objectivity could be  impaired. (An exception is if they specialize in a mortgage that one particular lender offers.)
  9. Recommend the ideal term and explain the reasoning in plain language.
    • And show us a hypothetical amortization comparison to back up that recommendation
  10. Get us a rate that’s within 10 basis points of the best available–for the mortgage product we need.
    • We’re always happy to pay for service…but not overpay

Of course, there are many more broker selection criteria that could be added to this list. We’d love to hear yours!

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Comments

  1. Comment avatar

    Mike    

    Hi Melanie and Rob,
    Your list is good. I’d only add one thing. I think it helps to look for someone who works for a respected company. The more recognized brokerage firms usually have better compliance and access to rates. Would you agree?

     
  2. Comment avatar

    newbie    

    Have you ever been a newbie? How did you start than?

     
  3. Comment avatar

    Robert McLister    

    Sure have! We all have. It’s a daunting process. You don’t even know how much you don’t know until you’re a year or two into the business.
    You need a rock solid mentor and you need to assist on numerous deals before you’re qualified to advised clients and take the lead on files.
    Read as much as you can, know the math behind comparing different terms, and never be embarassed to ask questions if you’re even 1% unsure about something.
    Best of luck in the industry…
    Rob

     
  4. Comment avatar

    Robert McLister    

    Hi Mike,
    In many cases that’s true. Some of the biggies: Invis, Mortgage Alliance, Mortgage Architects, etc. have strong in-house compliance departments. A few of the large brands, however, don’t focus as much on compliance corporately because the responsibility often lies with the franchisee.
    In terms of rates, all the big firms have their own deals cut with certain lenders. Some of the big ones definitely have better deals than others.
    Conversely, you can still find smaller shops that do huge volume, have great rates, and have flawless compliance.
    Cheers,
    Rob

     
  5. Comment avatar

    EMS78    

    Hi Rob,
    These tips are really helpful. I would add just one and that is, find a broker who doesn’t play games and tells you the best rate right away. It drives me batty when brokers (and banks for that matter) ask you for an application before they will give you a rate. I don’t mind explaining my situation but some of these people expect a police check and cavity search just to give you a rate quote.
    Ed

     
  6. Comment avatar

    mortgagediva@SHAW.CA    

    To EMS78.
    A good broker will have a long conversation with you about your situation BEFORE doing either rate quoting or applications.
    There are far to many factors such as type of employment your in, your credit history, is it a rental property.
    Not to mention, I may quote you a rate and even get it in writing…then the rate may drop and your good broker floats down your rate.
    My advise…if you are feeling pressured or uncomfortable – get another broker.

     
  7. Comment avatar

    Greg    

    Wow who are you to say that a newbie can’t be a good broker. I have never come a cross a good mentor. There are no good mentors. A bunch of self serving, self promoting bigots, I am “shocked” to see you put your guidelines that leave you as an option. Wow.
    There are many smart, honest and knowlegeable newbies out there who can deliver and have delivered for their clients.
    Too many brokers come on these forums and self promote. They don’t care about the unfair business practice that are occurring in the industry as long as they get their deals.
    I agree that customers have to do their due deligence, they have every right to do that. What I don’t agree with is this author totally excluding new brokers. How does he expect them to gain experience at what they do.
    There have been new legistlation (MBLAA) to protect consumer. The new legislation has an education component that allows all agents that are license to pass a mandatory mortgage agent course.
    (Some experienced brokers try not to do the exam- so they are not upto date with new critical information)
    The legislation imposes strick guidelines on Brokerages that they have policies and procedures for their brokers and agents to follow.
    Also FSCO has been working hard at bringing all brokerages under compliance under the new rules. Their recent report demonstrate that the new legislation is actaully working and so the consumer is better protected.
    Yes, it will take time for the legislation to fully become effective but it does not reflect that the “newbies” are imcompetent.
    Infact the newbies are much more knowledgeable and are customer focused and will probably deliver better service than the “experienced” broker.
    So give the “newbie” a chance. Question them, Make them earn their money. Remember some responsibilty lies with you the consumer to become knowledgeable about what you are buying.

     
  8. Comment avatar

    Robert McLister    

    Hi Greg,
    Thanks for the note. You raise many fair questions.
    What I was saying was that I (personally) would not use a new broker for my mortgage.
    In fact, I would not have used myself as a broker in my first year in the business–and I ate, slepted, and breathed mortgages 14 hours a day. Ask my wife. 🙂
    There’s just too much to know and too many mistakes that can be made from lack of experience. If you’re in the industry you know what I mean.
    New brokers need significant training and they need to be assistants on numerous deals before they’re competent enough to do deals solo. You’d never trust an articling lawyer with legal advice. You’d never want a rookie pilot flying you cross country. You’d never want an accounting intern giving you tax advice. Mortgage brokers are no exception.
    I’ll stress again, new brokers need to get a good mentor, and I totally agree with you that they’re hard to find. But if you want to be the best you can be, you have to make an effort to find one. Then, you need to assist on underwriting, submitting, managing, and closing dozens of supervised deals before you reach 2nd base in this business.
    All that said, the best thing about rookie brokers is that they are very eager to close deals. So they’ll often work very hard for clients and won’t be distracted by 20 other deals at the same time.
    Cheers,
    Rob

     
  9. Comment avatar

    Don    

    As a broker with more years in the business than I care to admit, I am in agreement with the point about young brokers needing better training. FSCO does a good job at ensuring brokers have an understanding of the law. However there is little practical knowledge in the mandatory educational requirement. To serve customers well, our industry needs significantly more hands-on training requirements. It should be compulsory that brokers partake in an internship period of some sort. We are counseling people on the biggest debt they will ever take on. As the author states, mistakes in this profession can be costly.

     
  10. Comment avatar

    Steven    

    Greg,
    Frankly, legislation has little to do with providing good mortgage advice. It takes much more than passing a government test to be a good adviser.
    I would second the importance of experience. Without it, you have no frame of reference for recommending effective mortgage strategies. Experience is also the only effective way to gain product knowledge, learn proper underwriting, handle problems, meet deadlines and facilitate tough deals.
    Steven

     
  11. Comment avatar

    Calgary Mortgage Brokers    

    How are you supposed to “diversify your deal submissions and not send over 40-50% of your volume to any one lender.” AND have “status” at 3 or more lenders?

     

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