With 47% of mortgages in Canada up for renewal this year, brokers will be busy. But what will their strategies be?
Frances Hinojosa says she’s been in touch with various lenders comparing their best products and solutions, as well as focusing on her brokerage’s marketing strategy.
“We are looking at our various lenders that have the best products and solutions available to us for collateral and conventional switches,” said the Tribe Financial managing partner. “We’re also looking at our marketing strategy; 2018 is an opportunity for refinances and switches, and even purchases with the right solutions in place for the consumer.”
She warns that some clients won’t get the best rate on an uninsurable refinance, however, that could open the door to moving into a new home.
“They could take the equity from their sale proceeds and pay off their non-mortgage debt,” said Hinojosa. “This could allow them to go into the new home without any other monthly debt obligation and possibly qualify to buy the new house under the insurable or uninsurable guidelines, which would allow them to potentially secure a far better interest rate than they would if they simply refinance.”
While a lot has been made of the new mortgage qualification rules, Hinojosa believes that this is the year brokers prove to their clients that they’re worth their salt.
“We are heading into a market where the need of a mortgage will be more about the structure for the client, in terms of monthly cash flow,” she said. “Our lending partners out there have so many different products and solutions available. Now is the time to learn all the possible programs available in your market and work your marketing campaigns around these products and solutions.”
Ron Butler of Butler Mortgage isn’t convinced cash flow should be borrowers’ main priority as much as paying their mortgages off expeditiously.
“(If their biggest priority) is cash flow, there’s something fundamentally wrong with their family’s budget plan,” said Butler. “The consumer should always focus on the best possible rate and how quickly they can pay the mortgage off. Those are, universally, the two biggest issues—‘How quickly can I pay off my mortgage and what’s the lowest rate I can get my hands on?’ The low rate enables them to pay it off faster. If I focus on cash flow, I’m not paying my mortgage off.”