This segment Clinton and Todd bring on contractor and civil engineer, Dan Monk, to chat about home renovation costs and trends in Halifax, some red and green flags to look out for when hiring contractors, and some simple renovations or improvements you can make to help you love your home.
In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on News 95.7, the guys talk about how brokers find unique mortgage solutions for clients, alternative mortgage lenders and what it looks like when a broker submits a mortgage application.
Mortgage 101 with Clinton Wilkins & Todd Veinotte – July 2021 – Part 3
Don’t feel like watching the video? Check out the transcript below.
We can pair unique clients with unique lenders
Todd Veinotte: [00:00:00:01] You talk about having over 40 lenders. What’s the big advantage to that for those who don’t know is mortgage broker, why is it an advantage to have such a diversification when it comes to lending capabilities?
Clinton Wilkins: [00:00:11:13] So we may have access to 40, really 40 plus when we’re taking into account, like Todd mentioned, private lenders. But there’s probably 10 that we use, regularly, and probably five that we use every day. It’s relationship.
It’s relationship, it’s product, it’s rate and it’s service, and not every lender is the same. And I can tell you, we certainly get referrals from the big banks every day because they can’t necessarily fit the client in a box, but they think it’s a good client. But guess what? We do businesses with the big five as well.
So some of our biggest lenders are the banks, but it doesn’t mean that those are the only lenders that we deal with. And we’re experts in doing just one thing. We’re experts at mortgage lending.
We’re experts at really identifying those snowflakes, because I think every file is kind of like a snowflake. We look at income, we look at assets and we look at credit. And there’s so many different nuances and just figuring out where the best solution for the borrower is really going to be.
How much freedom do alternative lenders have with their mortgage products?
Todd Veinotte: [00:01:16:13] Ok, so again, when you’ve got all these various lenders, some of them are willing to take on risk in a different, different way, the rate reflects that. But I would think having some private lenders, having the ability to look at a file autonomously and with their own judgment, as opposed to perhaps some of the banks, which is protocol. And there’s almost a formula lending, I’m sure, right?
Clinton Wilkins: [00:01:39:21] Well, the banks are all federally regulated, so they have to lend within certain guidelines. And then there’s alternative lenders, which then still have to lend within guidelines, but they have to justify those guidelines.
And then there’s credit unions who are provincially regulated. So, again, they’d beat to the sound of their own drum, within reason, and private lenders, which could be a mortgage investment corporation. Or maybe it’s an individual like you and me. And, you know, we’re lending out some of our own money for borrowers.
Typically, the alternative lenders, the private lenders are more costly because they’re taking on files that have a higher risk, but oftentimes they’re for a shorter period of time. They’re maybe taking on the risk for three, six, 12 months, 24 months, 36 months. They’re not in business with the borrower forever, or for even 25 years like a normal bank lender would be.
Bank lenders that aren’t your traditional big banks
But when I say bank lenders, I don’t necessarily mean the big five. There are bank lenders which we consider a monoline lender or broker-only lender, that they might not have bank branches, but they have a bank license. But maybe the only type of business that they’re really doing is mortgage lending and maybe their deposit taking as well, but they’re not offering like consumer bank accounts. Maybe they only offer maybe investment type products where like GICs or bonds or whatever that they may offer.
So we’ve access to a variety of those lenders and we can also identify which client and which product is really the best fit. When you walk into a bank or credit union branch, you can only get what they have. Where we can get whatever we think is the best fit for that borrower and we’re doing many transactions, so on a really busy month here in our office, we’ll do upwards of 100 transactions.
A normal bank branch would only do about 100 transactions a year. So that really just shows the amount of files that we’re looking at and we can figure out what those nuances are and figure out where the best solution is for the borrower.
Submitting a file for approval — what’s your best practices?
Todd Veinotte: [00:03:42:05] When you put together an application to one of the private lenders. And obviously if you’re submitting the application, there’s some worth, it’s worthy of the person’s time to look at it?
Clinton Wilkins: [00:03:56:20] 100 per cent. We only submit a file when we think it’ll be approved. We don’t submit files just to see if they’re going to stick. You know, we’re not taking spaghetti and throwing it out the wall and see if it’s going to stick. We only submit files to lenders when we go with the assumption it’s being approved.
Todd Veinotte: [00:04:14:01] Do some brokers have that other approach where they’ll just send it?
Clinton Wilkins: [00:04:17:17] I can’t comment maybe on like what the competition does.
Todd Veinotte: [00:04:19:22] Why not comment on what the competition does?
Todd Veinotte: [00:04:21:17] I think that there’s I think there’s a lot of, just like submitting it and not knowing what’s going on. We don’t do that here. We don’t have the time to do that here. To be honest, everyone. Like we are very, very busy. But it’s the expertise and it’s better for the client because, you know, if it’s a quick no, it’s usually quick no for something that we don’t know.
Sometimes there can be hidden issues
So maybe there’s something on the credit bureau that we don’t see. Some lenders like we use Equifax here in our office, but some lenders will use Equifax and TransUnion. So maybe there’s something on TransUnion that we don’t see. I don’t know. There could also be maybe some negative history with that lender for the borrower. And we didn’t know that. So it was only available maybe on their internal system and it didn’t show up on the credit bureaus. So we weren’t able to identify those issues.
And then sometimes there can be issues that pop up kind of after the fact. Maybe there’s issues with the property, maybe it’s not that marketable. Maybe the, you know, file is somewhat marginal and we really believe that we could sell it to the lender, but it wasn’t within their appetite.
It happens, but I think that we are really good at providing that feedback to the clients. They know exactly where their situation is. They aren’t just like sitting and waiting and hoping and dreaming and, you know, saying a prayer that their mortgage is going to be approved. We communicate with them, and if there is an issue, we’re telling them and then we can always make a plan.
Making mortgages happen using unique solutions
Every borrower in Canada can get a mortgage. I’ve said this before, but if your income isn’t quite there, maybe it’s stated income, maybe you’re self-employed and maybe we have to use an alternative lender.
Clinton Wilkins: [00:05:57:28] Maybe your credit’s not that good. Maybe we need to use an alternative lender or a private lender. But if we have to use an alternative or a private lender, maybe you need 20 per cent down, or 25 per cent, down or 35 per cent down, or 50 per cent down. And the challenges in more rural areas, not every alternative lender lends there. That’s just reality.
Not every lender in Canada lends even in Nova Scotia. You know, we are a small market compared to markets like Ontario and B.C. But guess what? We are getting noticed. I can tell you there are some lenders that we are the only brokerage that has access to these lenders. We are basically doing pilot projects for these lenders in this market.
So coming to a brokerage like ours, we are small. We don’t have 40 or 50 mortgage brokers. We don’t there are four of us that see clients, but we have a great amount of support. We have fulfillment advisors and we have customer service advisors that answer the phone every day. And, you know, I still do mortgage lending.
Some people call or email and they just assume that I just do like radio and TV and, you know, write books and posts and emails and stuff like that. I actually see clients fulltime. And I think that’s what’s really, really important because I may have a great team of people, but I’m also in the thick of things with them. I’m in the trenches, so I can see those trends and I can certainly provide that feedback and that advice.
Each broker in the office has an area of expertise
Todd Veinotte: [00:07:32:14] What’s your ratio of, success may not be the, but of approval of things that you submit that get approved across the board. I’m sure you’ve got that metric.
Clinton Wilkins: [00:07:42:27] I have a very high approval rating. I actually have the highest approval rating in the office. But that’s based on experience. You know, I’ve been doing this for 15 years in the same industry. Same lenders. I very, very entrench relationships. But also, I don’t try to do every file. I know what I’m really good at.
We still offer all kinds of different financing, like you talked about private lending and alternative lending. I typically don’t do those files myself because I’m not an expert at those files. But we have a couple of people in the office that really, that’s their bread and butter and maybe I’ll start the file or maybe I’ll get going on a file and I’ll identify it, that this actually needs an alternative lender and I’ll work with the team in the office to do it.
But the reason that I’m really focusing on, you know, purchases, refinances and renewals is because I don’t want to be everything to everybody, but that doesn’t necessarily mean that we’re not offering it in the office. But I want to be, really, the ultimate expert at a very few things. And I think I’ve, you know, we’re in that position.
It’s the same thing when people talk about side hustles and all these things, I think that you should be the best at what you’re doing. And go all in. I can tell you, I’m all in on mortgage lending. We wouldn’t be here and be on the radio on Saturdays and Sundays and on Tuesdays and doing these type of things if we didn’t want to educate consumers and Todd, I don’t think you would be here either. You know what I mean? And I’m probably sure that after all these years, you never thought you’d know so much about mortgages.
Having different conversations with first-time home buyers and repeat home buyers
Todd Veinotte: [00:09:25:13] I think I know more about mortgage lending than the average person.
Clinton Wilkins: [00:09:28:08] I will 100 per cent agree with that. And, you know, I hope our listeners that are listening know more than consumers that are just walking on the street. And I really pride myself on that. You know, I think that we provide lots of great information and, you know, we’re going to continue.
Todd Veinotte: [00:09:47:12] Can you tell when people come into your office and in sit across from you what their level of, first of all, their interest is and what their level of knowledge is pretty quickly?
Clinton Wilkins: [00:09:55:23] Oh, yeah. I definitely know kind of how savvy they are. And obviously we get more into certain things with people that are maybe the first-time home buyer, versus repeat. You know, today I had a first-time home buyer sitting in my office to sign their mortgage documents, and I had an existing client from ten years ago coming in to sign their mortgage documents. Very, very different conversations.
Really, first-time home buyer it was conversations around affordability and, you know, making sure they can afford it and things like mortgage insurance and how do how does a property tax account work and when do the property taxes come out? But the existing client we were talking about, how can we pay down your mortgage faster? What will we do on your next renewal strategy? Things like that. It’s very, very different conversations. But that’s why I think it’s so important to use an unbiased mortgage professional, because really it’s about the relationship.
See you next time on Mortgage 101: Your Guide to Homeownership
Todd Veinotte: [00:10:51:07] You know, we haven’t talked about cottages yet, we teed it up twice now and we’ve not talked about it. So we have to talk about it.
Clinton Wilkins: [00:10:57:05] We will talk about cottages. And I promise you, we will talk about refinance.
Todd Veinotte: [00:11:02:16] Cottages, refinance that and perhaps a few other things. Mortgage 101: Your Guide to Homeownership. Clinton Wilkins and myself, Todd Veinotte, returns right after this.
If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.