Rate discounting may be a necessity these days but many brokers are pushing back by drawing attention to the added value of advising clients about more than just rate.
“With the rate wars that go on people get too short-sighted and focus too much on rate,” Blair Anderson of Anderson Associates told MortgageBrokerNews.ca. “That whole approach doesn’t appeal to me; traditional advising role is pushed aside when the focus is placed on rate.”
The importance of rate is evident in the rate buy down trend seen throughout the industry.
According to CAAMP
’s most recent report, rate discounts now average 1.95 percentage points for five-year mortgage terms.
However, Anderson is personally trying to change consumer thinking with his community-based website, mortgageresource.ca, which focuses on educating the public about the value mortgage brokers can provide to home buyers.
“The focus on rate is a trend I’m trying to fight against,” Anderson said. “On this website there is no pushing rate; no one shows what rates they can get because it focuses more on educating the consumer about the breadth of the business and the industry.”
It’s Anderson’s personal answer to rate sites which, according to the veteran, independent broker, have “commoditized” the brokering business. He also downplays the influence they have on the industry, estimating that only one per cent of mortgages are funded through the popular websites.
He isn’t alone in his advice-first approach to mortgage brokering.
of Invis The Mortgage Lady applies a similar approach to her business.
“I don’t believe in buying down rates unless it is absolutely necessary,” Wong-Liao said. “Independent brokers are unique because we can offer so many alternatives that the banks can’t; these offerings allow me to not only focus on rate.”