I get frequent questions from clients that say, “my lender is who?” and it is usually because they aren’t familiar with a broker-only lender and there are a LOT of broker only lenders. This video blog explains why we use them instead of the big banks 100% of the time.
Transcript of Video Blog:
Hi, everybody. It’s Rowan Smith from the Mortgage Centre. I want to address a couple of questions that I’ve received on some of the lenders and how we brokers make our decisions as to which lender we’re going to send you with.
By and large, we brokers are paid approximately the same at most lenders, if we’re offering the competitive market rates. We generally have a list of maybe four or five, kind of our top five, and those top five vary from broker to broker.
It’s one of the reasons that we get differentiated, is our service level. We typically like to use institutions who have a very fast turnaround, who will get back to us quickly, who will answer their phone and who will accept more common practices in the industry.
A couple of questions people brought up were — I’m going to grab a couple of different lenders that we use — who is McCory Financial, or who is FirstLine Mortgages? Because these two institutions play a pretty big role in the market right now, and a lot of people don’t know who they are.
Many of my clients have been placed with them. I, myself, have two mortgages with FirstLine Mortgages, and I have no problem placing clients with them. So, who are they? FirstLine is a division of CIBC. They’re a subsidiary of CIBC, one of the big banks in the country, and they’re just a different channel.
Certain banks have made a decision to try to get business from the branch network, to try to get business from brokers. Because we’re one arm of business, they don’t have to pay us a salary. We’re paid a one-time commission, so there’s only a cost if we do a deal with them. And for that rate, they can offer very, very low rates.
Some of these non-retail lenders, like FirstLine, are very efficient at what they do. The only thing they do are mortgages. They don’t want your direct deposit for your payroll, any of that other stuff. They just want the mortgage. That gives them a lot of efficiencies that perhaps some of the other big banks don’t have.
So, who are all these banks? Because you’ll see on my web page and a lot of my advertisements, it’s 40-plus lenders. If I challenged every one of you to name as many banks and credit unions as you could, I’d be impressed if you could come up with six or seven. We have many, many lenders.
An example — ING Direct. People often say to me, when I place them with McCory or I place them with FirstLine or something like that, is it really secure being with them? A lot of people invest with ING Direct, who does not have retail branch locations, or they have maybe one in two or three major cities in the entire country.
I’d be much more leery of where I was putting my cash-invested dollars, rather than where I’m borrowing from. Should one of those lenders go under, at the end of the day, there’s going to be another lender behind them that will take over the mortgage. You’ll continue to make your payments. And the transition, while perhaps not seamless, will nonetheless not make you be foreclosed on, or lose your home or any of the doom and gloom that some people are predicting.
If we give you a great rate, and you ask us who the lender is, and it’s someone you haven’t heard of, that may be because it’s a promotional rate and the lender’s trying to gain market share. Also, very likely, they’re probably owned behind the scenes by one of the big financial banks, anyway.
So, if you, or someone you know, is getting put with a lender that they’re not familiar with, and maybe you’d like some information on what that lender is, who they are, how long they’ve been around in the market, give me a call. It’s Rowan Smith at The Mortgage Centre.