How many times a day does a Mortgage Broker hear, “So, what’s your best rate?”
Clients are thinking in those simple A to B terms.
Brokers need to be thinking A to Z.
As a Broker, you must offer clients samples of the knowledge you posses in order to draw from them vital pieces of data that they may not think important enough to share with you.
Here are my A-to-Z questions to ask clients before we get to the question they want answered:
- Variable or fixed mortgage?
- If fixed, 1 year, 2year, 3 year, 4year, 5 year? (Never 7 year nor 10 year.)
- If variable, which lender? Features vary greatly between lenders.
- With a line of credit feature or without?
- 20% down or less, can they reach 20% down?
- Portability from one province to the next?
- Specific plans around lump-sum penalties.
- Any as-yet-unnamed parties that will need to be on title?
- Any parties on the application that prefer not to be on title?
- Will title be held in the name of a holding company?
- Origins of down payment?
- Are all applicants’ income taxes filed and up-to -date?
- Is there a commission, bonus or overtime component to the income?
- If part time, are the hours guaranteed?
- Is the client’s current banking done with an institution we have access to?
- Are there debts not showing on one credit report that might show on the other?
- Does the client own any other real estate?
- Was their previous mortgage insured (i.e., CMHC)?
- If yes, does it make mathematical sense to pay the top-up premium?
- Is the client aware of all of the other related taxes and legal fees?
- If a new build, were there builder incentives in the contract?
- Was the property ever a grow-op or drug lab?
- Are extensive upgrades planned?
- Are they considering knocking the home down and rebuilding?
- Is this a fix and flip, or a long-term hold?
- Oh yeah… so what’s the best rate factoring in the answers above?
Some of these may seem stupid, invasive or premature, but be assured, they are not.
The point is that you, the Mortgage Broker, have the ability to save your clients thousands, sometimes tens of thousands, of dollars. You’ve also got the power to lose them the same amount of money. Recognizing this and understanding your influence over clients and their files can be overwhelming when you realize how little you know. Clients view you as the professional (mind reader) in the equation. They put more faith in their Broker than they should, and clients always ask too few questions.
It is on the Broker to ask questions. Never be afraid to ask your clients, your fellow Brokers, your lenders a seemingly stupid question. In this business, stupid questions save files. Stupid questions save clients (from themselves). Stupid questions save Brokers from losing clients, referral sources or worse.
Remind your clients often that when it comes to getting the best mortgage, there are no stupid questions and that they should ask you every single little thing that pops into their heads. This can be pivotal.
Clients and Brokers alike lose when questions go unasked and thus unanswered.