This is the story of a young couple we saw walk into a mortgage broker office while we were filming that broker deliver advice to other brokers on our M|M University platform.
Jayden and Laura walked in and were absolutely distraught over their mortgage falling through at the last second with a major Canadian bank. Naturally, we paused filming so this broker could sit down with their potential new client and discuss what had happened.
What became very clear is that even though this had happened, and the couple had their trust breached by the bank; a bank, that he got his first account with when he was 12, held his student loans with, and essentially was his lifelong institution, that violated his trust. Despite all of this, the couple had clearly come in and were not simply ready and willing to accept using a mortgage broker for their home financing need just yet.
This couple was incredibly reserved in sharing the details of their finances, and Laura was more interested in the conversation than Jayden was.
He got up and walked around, stared out the window while the broker discussed things with his wife and then did one fateful thing that allowed for an incredible realization, not just for the couple but for us at Mortgage Magnates as well. He made an incredibly blunt statement: “Well I am not at all understanding the value of the services you provide. I am really not sure what my ROI on your advice is or will be”.
His opinion was that they should just have gone to see a competitor of the original bank and be done with it. Howevner, it was the response of the broker to that statement that altered the entire foundation of why this couple engaged the broker in the end.
The broker gave three outstanding reasons why you should use a broker, reasons the two upset clients couldn’t really argue, and the deal funded about two weeks later.
Let’s start with the old adage, “we always do it this way”.
Most brokers would respond in a way that tries to force them (the client) to see things our way. We always seem to want to justify our value, and we often say things like “here’s why our services are so valued, here’s why I’m so qualified, this is my agent license, my broker license, I run this place”, etc. But because of clients past experiences, sometimes these clients expect this type of response and shut down to it. They just simply aren’t listening.
But this broker went a very different way. As the old saying goes, “the truth will set you free”.
Whether you are a broker reading this to overcome this stalemate with a client, or a client simply wondering if you should use a broker; these three factors are truly the reason to engage a broker over anyone else for your home financing needs:
Not the “service” in that the broker picks up the phone or calls back in good time.
This is service centred around the planning that’s involved in your long term mortgage strategies.
Today it’s your first home, tomorrow it’s expanding your family, 10 years down the road it’s renovating the kitchen. It’s also the affordability advice, the scenario simulations, the involvement of other intermediaries like your realtor, lawyer, accountant and so on.
The laser focus you get from a broker, is not comparable to anywhere else because home financing is all they do. You reaching your goals and better yet, understanding your goals as well as making sure you are doing the right things to reach them are all your broker cares about.
Unlike the picture the banks tend to paint at times to get your business, at the end of the day the equity in your home or the money you have for down payment or the leveraging you can do with your home for things like investing in your kids education or paying off debts are not unlimited. So it is important to understand that the main thing you need to be confident in, is an understanding of how the things you do want to accomplish with arguably your biggest single purchase and investment in your lifetime, align with your ultimate goals, and the main things that you want to accomplish with your home over time.
Not all clients place a value on number one. We all know the “do-it-yourself” client who feels like they can do it on their own, or if you are a client thinking ‘I can go on a website fill out an application and be done with it, I know what I want’ then maybe the second reason might align better with why you should rethink this approach and still choose a broker.
The Value of Your (The Clients) Time
If you are going to spend 3-5 hours every single weekend deciding on a mortgage solution on your own, or whether to buy that investment or rental property and how that process would work. Maybe you are spending time contemplating where the money will come from. What will the taxes look like? How do I factor in rental income? Is it better to pay off my car with the house? Should I consider the STEP mortgage my bank is offering?
The key here is your time is valuable and considering all of these factors takes up a lot of it. A mortgage brokers advice is of significant value even for the self proclaimed do-it-yourselfer because of the amount of reduced time and stress it will take to get those answers you seek.
You can easily take back those hours of pondering your options by leveraging a licensed broker who can answer these questions for you, and can use precedent (just like a lawyer) to uncover situations and scenarios that have worked in similar circumstances to yours far faster and more accurately than an afternoon Google search can ever provide.
Lastly and most importantly….
The Opportunity Cost of Making a Mistake
The reality is, in this robo-world we all want to try our hand at doing it ourselves to save a buck, or even just to say we did it. But like the piece of paper the bank’s pre-approval is written on, that attitude isn’t worth a thing. That’s because the devil is in the details. If you make a mistake here, you could cost yourself thousands of dollars or even the home altogether.
Getting the right advice from a mortgage broker reduces the risk of a mistake dramatically. For example, we have seen situations where a bank processes a rental purchase for someone that should never have gone through and that they truly can’t afford, just because the basic numbers worked and the questions asked were few.
The same client turns to a broker and has to have the whole thing restructured to make it work, and to make sure they don’t lose their primary residence in the process. Examples like this exist everywhere, and seeing a broker in the first place can prevent these things from happening.
The fact is, most people will make an emotionally charged decision around their money and their home at some point in their adult life. The cost of that decision could be in the 6 figures or even the 7 figures in some cases over time, depending on how high the stakes are in the decisions you are trying to make.
The job of the mortgage broker is to eliminate the risk of making those mistakes, that is why they have to hold a license and abide by regulations and rules. It is a brokers mandate to help eliminate those mistakes or alleviate the emotionally charged buying or financing decisions that you make that you could perhaps later regret.
The idea is to make sure that if a mistake is made, the opportunity cost of that mistake is as close to zero as possible.
In the end, as mortgage brokers what is provided is a service that is valuable, it’s very tangible and can produce significant impact on your finances, your home, your borrowing decisions and the way you ultimately live.
Brokers provide clarity and confidence that you are on the right track and hopefully some peace of mind that you are not going to make a mistake at some point in your financial life, when you have a high level of emotion involved.
This is also why it is important to view your broker as a lifelong relationship like your doctor, dentist or financial advisor. The longer you are with them, the more they understand your goals and dreams and can help. It’s hard to get this with a bank because of the high level of employee churn they experience.
For brokers, sometimes this conversation is all about total candor with the client in identifying your value and why they should choose you over their long time bank.
For clients, it’s really hard to see a negative in choosing the right mortgage broker for you. You get the right advice, at the right time, all in one place and the value of that, can be life changing.
Choose advice. Choose a mortgage broker.
Mortgage Magnates is a streaming service for Mortgage professionals. It is designed to develop the sales, consultative advice, value of advice, marketing, business management and business development skills of the mortgage agent and broker. It is solely video content of top producing mortgage professionals across Canada sharing their best practices and what works for their business to drive results. You can subscribe to Mortgage Magnates for just $13.99 per month and access unlimited content with new videos added every month to raise and keep your mortgage practice at the top of it’s game.