CEO delivers his verdict
They’ve always been an essential component of navigating the mortgage market as a broker – but in 2023, broker-lender relationships have become even more important amid more complex borrower circumstances and an ever-shifting regulatory landscape.
With that in mind, a leading executive in the lending space is encouraging brokers to prioritize communication with their lender partners and make sure they’re constantly checking in to keep posted and stay apprised of the latest developments and trends.
Ron Swift (pictured top), chief executive officer of Radius Financial, told Canadian Mortgage Professional that it was doubly crucial for agents and brokers in the current climate to maintain regular and productive contact with business development managers and lender representatives.
“Keep the lines of communications open,” he advised. “There are a lot of different unique circumstances out there, and I would just say continue to reach out to your lenders and talk to your lenders to [hear], ‘Here’s what’s going on, and talk me through what’s happening with your customer, and see how we can help out.’”
Higher interest rates and changes in recent years to the criteria for mortgage qualification have presented challenges for many Canadian borrowers, with the path to secure a mortgage now fraught with complications.
Still, Swift said while some borrowers may view the current market with a dose of pessimism, they and their brokers and agents might be surprised by their options.
“The world continues to move and evolve where clients qualified before and [now] don’t qualify – or maybe sometimes people think that they wouldn’t qualify, but they can qualify,” he said.
“I think having this increased communication and dialogue with your lenders is critical as the lenders are continuing to evolve and adapt. Staying front and centre with your lenders to see what they are doing and know who’s doing what, I think, is imperative for all brokers.”
Keep your options open, executive advises
It’s also essential for brokers to focus on a wide range of lenders, Swift added, and not hitch their wagon to a single company. Doing their due diligence and being able to present as varied a list of options as possible will ultimately benefit both the mortgage professional and their clients, he suggested.
“The market’s shifting too fast. You can’t just stick with one lender and say, ‘This is it. It’s my ride or die,’” he said. “I think today, there are too many variables with consumers and what they need, so having a number of lenders available is important to get who they are, what they are about, and creating relationships with them by sending them deals.”
Swift, a former broker and mortgage industry veteran, has long emphasized the value of education and furthering knowledge as a way for brokers and agents to build experience and provide maximum value to their clients.
Speaking at the Canadian Mortgage Summit hosted by CMP last November, he said staying up to date with the rapidly moving news cycle should be a key consideration for brokers as they help borrowers through trying times.
“Going out to seminars, listening to other people’s words and trying to understand what’s going on, reading what’s going on” should be top priorities, he said. “I don’t expect you to be economists, but you need to understand what’s happened to inflation, what’s driving inflation, and where we think the end road’s going to be.”
Daniel Vyner of DV Capital Corp said that alternative and private mortgage borrowers who purchased or refinanced at the height of the recent boom to access home equity or enter the market were facing “multiple layers of issues” in 2023.— Canadian Mortgage Professional Magazine (@CMPmagazine) May 11, 2023
What’s changed in the mortgage market in recent times?
After the Bank of Canada slashed interest rates at the onset of the COVID-19 pandemic, activity and sales in the national housing market shot through the roof with many Canadians availing of pent-up savings and lower borrowing costs to purchase a home.
Towards the end of 2021, regulators amended the qualifying rate for both insured and uninsured mortgages to the higher figure between 5.25% and the contract rate plus two percentage points – and with the Bank of Canada introducing a flurry of rate hikes in its battle against surging inflation, the days of record-low borrowing costs are a distant memory.
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