The “Best” Mortgage Brokers…

Mortgage-BrokerThere’s been a debate underway in Saturday’s thread about what characteristics comprise the “best” mortgage brokers.

Someone said that the best brokers were not salespeople, but educators. That was shot down by another, more cynical reader who felt commissions are our master.

For what it’s worth, here’s our take on the whole thing…

The reality: Brokers are not created equal.

To say that we are is like saying lawyers never overbill or mechanics never fix things that aren’t broken. There are thousands of mechanics, lawyers and brokers that are good people and put their clients first. It’s those bad weeds that spoil the garden.

Despite that, the fact remains that the best brokers make their interests subordinate to their clients. (Note, that “best” as used here, doesn’t refer to simply the highest volume brokers.)

“Best” refers to the brokers most capable of delivering:

a) the lowest overall borrowing cost (not just the lowest rate), and/or

b) the most satisfying mortgage experience.

Consumers are not all the same. Far from it. Some folks value things like time savings, certainty of closing, long-term debt-reduction/wealth-building strategies, credibility, and hand-holding throughout the process. Others would rather climb Everest to shave 10 basis points off their rate. God bless them all.

Per above, we can’t speak for all mortgage advisers, but we know one thing: the best ones never recommend inferior mortgages because they pay more. There are at least three reasons for that:

First, many mortgage professionals prefer to earn an honest living. That tends to make it easier to get out of bed in the morning. That’s why the best brokers quote the lowest rate they have available, right out of the gate. Some, albeit the minority, even refer clients to RBC, BMO, and HSBC when that best serves the homeowner—even though those lenders only pay commission to their bank employees.

Secondly, doing the right thing makes good business sense. People can detect from a mile away when someone is “selling” them versus “helping” them. It’s therefore much easier to meet a client’s “smell test” if you, the broker, would choose your own recommended mortgage plan for yourself, were you in the borrower’s shoes. Otherwise, you do things (often subconsciously) to sabotage your client relationships.

Lastly, it can never be overstressed that brokers live off of referrals. The fact is, people don’t refer business to those they don’t like, respect and trust. Making it long-term in this biz means exceeding expectations in those three areas. That and adding uncommon value are what define the “best” of the best brokers.

Rob McLister, CMT

  1. I’ve only had one experience so far getting a mortgage. My brother referred Melanie to me. I must say, I never felt pressured by her, and truly did feel she was working with MY best interest in mind. Even after I got my mortgage, she answered questions I had, even though she would have already received her comission off me. She was definitely and educator and in the short time she helped me, I learned so much about mortgages. She was very patient with me and answered all of my numerous questions. I would not hesitate to refer her to someone else and I will definitely be coming back to her when renewal time comes up.

  2. It always baffels my mind to think there are Brokers out there not making the effort to put clients needs first.
    Since income seems to be what drives them: think of it this way, you make perhaps 500 or so more sending a client to a lender that doesn’t suit that clients best interest but hey you got paid more. Well let’s look at the residiual effect here, you do good by a client and let’s say they tell 3 people who will now do business with you vs them telling 20 people you screwed them who now tell people you screwed their friend.
    How much money did you lose now?
    This is a customer service business we should always be operating with the clients best interests in mind.

  3. I we really care about are clients we would not be selling TD Canada trust collateral mortgages & Scotia Bank Step mortgages. The statics tell the story I am sorry to say.

  4. Excellent article AGAIN. Very true in that we have to try to “be all things to all people.” Giving your best makes you a happier person and people are drawn to you. The public rarely feel drawn to money shark personalities. . .
    I agree for the most part with John D too about Scotia and TD. . .but there are a few exceptions once in awhile.

  5. Well written Rob!
    I love my job and can’t wait to help and educate my clients. It is very sad when I hear my clients complain about their previous broker but it is these comments that make me strive to be better each time.

  6. Avoiding sending business to the banks is not possible. Sometimes the banks may be more flexible than monoline lenders with certain deals. Other times it’s the opposite. At the end of the day it’s about getting the deal to the satisfaction of your clients. If it means the banks are the most suitable lender, then that’s what has to done.

  7. I totally agree. I am a mortgage advisor with a credit union and the “Best” broker is the one that truly looks after their clients. I find the best ones don’t mind working with me either to find the right product for clients.
    Good article Rob.

  8. @mortgagediva – I couldn’t be prouder of being an educator. Not just of mortgages; but budgeting, credit, discounts, buying cars, and a roledex of experienced and trustworthy contact I have. With mortgages and our homes being the biggest investments we make in our lives, we as educators, need to advise our clients with options and explain penalties and fees. We need to be 3 steps ahead of the game to ensure our clients succeed.
    I hand hold my clients from application right through to signing at the lawyers. They know every step of the way what to expect with no surprises. I want them to have a 5 year plan and a budget and a goal.
    Their mortgage is not a transaction…it’s a life plan!
    Your Mortgage Diva.

  9. A little set of thoughts about brokers (of any kind) :
    1. The ultimate goal is to sell the product.
    2. “Educating” and making client believe this is the best product they are buying is a good thing and an essential part of broker’s job.
    3. I’m glad to see that most of the brokers here enjoy educating people in achieving their financial objectives.
    It’s the ultimate pleasure when you enjoy your work.
    I wish fewer banks close their doors to brokers channel, so consumers will have greater choice.

  10. I believe if we just educate all the time it won’t be selling, and you eventually won’t be selling the product. Some of the best professors and educators in the world are down right boring to listen to. I agree if we go full on Sales then we can refer to the good old tale of the “used car salesman”. If we can compare ourselves to ONCALL financial Doctors then the award would NOT go the doctor with the best Scalpel, but the one with the best bed side manners. Then we can ask what is educating the client? Do they really remember all this information we tell them? I won’t give them a test after the sale and say please perform this to make sure you learned. You assume your teaching. We assume were giving the best rate. All in all in the end were providing a service, and conveying that service in knowledge. bridging the gap of their knowledge in the industry. I think the best brokers are service orientate, extremely creative, and empower their clients and friends. The best brokers clarify, reduce risk, and of all else are truthful. Because as brokers we have NO TRAILERS and know we must SELL FOR LIFE!!!!

  11. I haven’t “sold” a mortgage since I was a rookie broker. I learned a long time ago that “selling” is a short term approach. Clients don’t want to deal with salespeople. They want advice from a longterm financial partner they can trust. You simply cannot give honest advice if you let commissions guide your actions.

  12. J.D. Power and Associates, an independent and trusted market researcher, has awarded TD Canada Trust “Highest in Customer Satisfaction Among the Big Five Retail banks” for the sixth year in a row. What makes this honour truly meaningful is the fact that it’s ultimately given by our customers.

  13. Great article about Brokers and advice… as a sidenote to TD Banker… that is a great accolade… having worked at a Chartered Bank for 6.5yrs as many other Broker’s have… not all banker’s are created equal either. I think we can all agree that it’s just good business to put the client first. You get what you give. I will be reposting this to my FBook Page… The more positive information and awareness we can create about our industry the better! Great work! Wishing you health, happiness and prosperity in the new year!

  14. Excellent post Rob. The term best mortgage broker cant be given to any one until u experience it. I came across one of the advisors from Canada Lend when i was searching for a mortgage loan. I must say they were so helpful in providing information and their first priority are their customers.

  15. Help please! I need some advice from an honest broker. I’m going through a situation now where I think the broker is trying to bully me into a close. Here’s the situation: I’m refinancing at a higher amount and looking to move lenders. I filled out an application with a broker to help. At the same time, I went into BNS and TD branches (where I do my banking) and each has offered to cover the legal fee and appraisal associated with the refinance. Literally the day I found out about the TD deal, the broker got the deal approved through TD. However, now they want me to pay almost $1250 in transaction fees (legal, discharge, appraisal). I’ve asked the broker about the TD free legal program and I just get one-worded vague responses. I also asked about changing from fixed to variable rate and they told me it would slow down the process by two weeks basically implying they wouldn’t do it.

    Any advice would be greatly appreciated, I’m really regretting having engaged this broker and feeling really bad about the whole situation.

    1. Hi John,
      You have to do what’s right for your wallet and peace of mind. Don’t feel locked in to your broker if you’re able to secure a significantly better deal elsewhere.
      It’s tough to recommend any specifics, since you haven’t mentioned your qualifications, application details or what other value this broker adds, if any. But clearly it’s your every right to receive the best overall deal you can.
      Work with the party you’re most comfortable with and negotiate like it’s your money on the line–which it is.
      Good luck…

  16. I just negotiated with RBC a 2-year fixed for 2.19% (branch discretion with minimum mortgage of $175,000), on an investment property. Two years ago I signed on for 2.49% for the same product. In addition, I upped the payments by $50.00 bi-weekly to further reduce my interest costs.

    A clear illustration that people are crazy-irresponsible with these low interest rates.

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