Mortgages for family members: Not as reliable as once thought?

Mortgages for family members: Not as reliable as once thought?

Mortgages for family members: Not as reliable as once thought? New brokers often count on close friends and family to become their first clients but it may not be as reliable a tactic as once thought, according to one industry professional who offers advice on securing these important deals.

“We all know that our family and friends should support us, but sometimes they don’t;  especially when it comes to getting their mortgage,” Joe White, president of the Real Estate and Mortgage Institute of Canada wrote in a blog post titled ‘Family and Friends: how to get their business.’ “Why?  It’s not that they don’t like you, it’s typically that they don’t want you knowing all of their personal info.”

The 20 year mortgage industry vet suggests teaming up with an established player to broker the deal, while also explaining the benefits to home buying family members about the benefits of working with a mortgage broker.

“This strategy is especially effective for newer agents who don’t have the kind of experience that would make a mother proud. You’ll earn that respect, but it will take time,” White wrote. “So to begin you’ll position yourself as having joined a very good brokerage (make sure that you have – this strategy only works if everything is completely true) where you’ve met a fantastic mortgage agent/broker.”

According the White this type of business relationship is beneficial for all parties involved: The new broker gets his foot in the door, the experienced broker earns a commission and the home buyer can rest assured their finances are kept private.

“Ask them if you can have this person call or email them to set up an appointment,” White wrote.  “Stress that your colleague won’t share any of their information with you (they can’t due to privacy legislation) and will take as much care of them as you would if you were doing their mortgage.”