The recent changes in Canada’s mortgage environment have put pressure on brokers from a number of perspectives. Clients are finding it increasingly difficult to qualify for residential mortgages, which is creating a gap in the market that needs to be filled by alternative lending sources. For brokers who want to remain competitive and boost their businesses in these challenging times, diversifying their suite of services and expanding into new areas is crucial.
“Mortgage brokers need to diversify because the same need for financing in the past still exists, but it now needs to be serviced by a different channel,” says Brad James of Fundever. “Many of the options that were available to people have gone over the past six months.”
James identifies four key areas that savvy brokers should expand into: commercial mortgages, private mortgages, bridge financing and special situation financing. “The main benefit for a broker who differentiates their services in these challenging times is the increased ability to maintain connections with their current database,” James says. “In these fearful times, the mortgage broker that diversifies and educates themselves on the different lending verticals can be seen as a problem solver and a resource that banks cannot offer.”
Canadian banks only have the potential to offer one set of services and products, but a mortgage broker can use the entire market in search of a solution. For brokers to truly stand out from the crowd and satisfy their current database as well as attract new clients, utilizing the potential of the services on offer is simply essential.
But how can a broker go about achieving this much-needed diversification? “They need to educate themselves on all of the available products and then adopt technology that connects them with these non-conforming products and services in the most efficient way,” James says. “Then, that broker should be sure to broadcast that news. Market the new knowledge to your existing database to reaffirm your value proposition.”