“intelliMortgage earns finder’s fee revenue like a typical brokerage … it offers two models: DIY and full-service, and the client chooses,” Rob McLister, the company’s founder told MortgageBrokerNews.ca. “On the DIY model, a $295 cancellation fee may apply where folks request an approval, we obtain that approval as instructed, and then the individual cancels the mortgage application.”
Essentially an online mortgage brokerage, intelliMortage offers two models for two different kinds of customers and allows users to “build a custom mortgage in seconds,” according to the website.
An increasing number of brokers are moving to a salaried approach in a bid to manage costs and offset the losses incurred by having to buy down rates.
intelliMortgage’s DIY model offers a similar tactic by employing salaried brokers.
“On the DIY side, folks are supported by salaried and licensed mortgage concierges (i.e., agents or sub-mortgage brokers) who are not paid a commission on the deal,” McLister said. “Moreover, we price DIY deals on a normalized basis, meaning we aim to earn roughly the same on every application.”
There are no up-front fees to the client who elects the DIY model, as much of the process has been automated; though a flighty consumer may be charged almost $300 if he jumps ship during the process.
"In practice, cancellation fees are rarely charged," McLister said. "But they serve an important function in offsetting processing costs and maintaining lender efficiency ratios, both of which help us deliver the best possible rates to consumers."
intelliMortgage also offers a more coached approach for the less independent client.
“If a homeowner prefers full-service advice instead, they work with a personal consultant (agent or sub-mortgage broker) who is compensated with a split, like the typical broker,” he said. “That said, our full-service consultants are required to recommend the most suitable product from all mainstream lenders, which means they are occasionally not paid on some deals.”
Brokers often lament the rate shopper who flees at the eleventh hour and one leading broker may have solved that problem by charging a hefty cancellation fee as part of his new self-directed mortgage shopping site.