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Factors That Mortgage Brokers Look At When Procuring Home Loans For Clients

May 10, 2021 admin 0

Image Source: Axis Bank

You may think that a home loan is either very difficult or fairly easy to come by, dependent on your financial situation. Nothing could be further from the truth! The complexities of loans by their very nature require due diligence by the lender and research by the borrower to find a suitable lender. For some borrowers, this research is quite time-consuming and frankly, they simply do not have the extra time on their hands to conduct this research.

Lending Institutions also spend a lot of time pouring over applications and vetting candidates for loans. This opened up a market for borrowers who needed someone to conduct the research on their behalf and lenders who needed someone to do the vetting of borrowers for them, hence the mortgage broker was born.

Mortgage Brokers Are The Middlemen

As mentioned, mortgage brokers conduct all the research needed to pair up borrowers and lenders together to facilitate a lending contract or a loan. Their reward for doing this work takes shape in the form of a payment or commission. This commission is paid either by the lender, the borrower, or possibly both dependent on the way the contract is written.

Factors That Mortgage Brokers Look For With Clients

The main factor that these home loan experts look at is credit and this credit factor is expressed in terms of a score. The main score that is looked at in Australia is the Equifax score which is similar to the FICO (Fair Isaac Corporation) score in the United States. Unlike in the USA, the Equifax score is not binding across Australia.

In fact, lenders and banks in Australia all have their own version of the Equifax score. What does this mean to the borrower? You could have a lousy score with one creditor and a great score with another. Usually, mortgage brokers aggregate all of the scores into an average when determining a client’s creditworthiness.

Another factor is your income and how long you’ve been at your current job. If you have a history of bouncing from job to job, this would reflect negatively upon your loan application as it shows a history of unsteady income. Part of the mortgage broker’s job is to present your application in the best light possible to garner the most interest from lending institutions. Having a stellar job history and steady income will go a long way to help foster that light.

Sometimes you hear the word “collateral” thrown around when discussing loans, but in this case, home mortgages are pretty cut and dried as the home financed IS the collateral in these types of loans. Now we’ll look at the lending side of things and see what mortgage brokers look for in lending institutions.

Factors That Mortgage Brokers Look For With Lenders

The most obvious factor for a broker to look for with a lender is that the lender can qualify the borrower on the most favorable rate possible for the lender. This goes back to presenting the borrower’s case as best as possible to the lender with a solid income, work history, and a good credit score.

The lower the credit score, the narrower the options become to the broker when locating a suitable lender. All is not lost if the borrower has a poor credit rating as there are lending institutions that will work with a lower credit score, albeit with higher interest rates for the borrower. There are also lenders who work exclusively with these types of cases, these lenders are typically sub-prime institutions.

For some brokers, they also look for the best commission rates payable to them by the lender in conjunction with all of the other factors mentioned above. This is to compensate them for the time and effort involved in brokering a deal between the two parties. Mortgage brokers also can protect their compensation in the way of clawback clauses. These clauses kick in when a borrower refinances their loan during the initial period of the note, usually within the first two years.

Final Thoughts

As you can see, there are many factors and situations that the mortgage broker takes into effect when conducting a deal between a home buyer and a lender. If you’re in the market for a home and need financing, do your due diligence and find a reputable home loan expert to help you get the best rate!

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The Role Ethics Play In A Home Loan Brokerage

March 24, 2021 admin 0

Ethics play a large part of who we are as people and this facet plays into virtually any business or industry. As a business, you want your company and your employees to exercise the highest degree of morality and putting the customer first. Unfortunately, this hasn’t always happened in the home loan broker industry as we saw firsthand what happens when ethics take a back seat to profits.

2008 – The Year The Bubble Burst

The year of 2008 started off with a stumble as the economy started signs of slowing down. The American Automotive industry hit rock bottom as the Big Three of Ford, Chrysler, and General Motors received a bailout from the US Government to keep business going. The worst was yet to come as the US housing market started to plummet with foreclosures rapidly going up.

The housing market bubble completely burst that summer as the economy sank even further. Through the haze of the defaults and the foreclosures, investigators found that the firms who suffered the most in foreclosures were the ones who offered the highest risk of mortgages. The appeal of increased commissions was too great to pass up in light of ethical business practices.

Interest Payments and Commissions over Common Sense

The brokers worked out deals with sub-prime lenders who offered so-called NINJA loans which stood for No Income, No Job, and No Assets. These high-risk applicants were approved with no credit history, no documented way to pay, and no collateral. The lenders and brokers wanted a piece of the then-hot real estate market. Home buying and home construction projects were at an all-time high and the ceiling to this market looked limitless. Sadly, every economic bubble bursts at some point as the good times can’t last forever.

Instead of sticking to tried and true standard operating procedures, the lenders and brokers acted out of greed and FOMO (Fear Of Missing Out) and let those two emotions cloud their overall judgement. As a consequence of these actions, the brokers and lenders partially contributed to the short-term demise of the housing industry, and to a greater extent, the long-term economic recession that happened.

Ethics – Putting The Greater Good over Profits

Brokerages should focus on their clients’ needs and be realistic about their clients’ aspirations. There’s absolutely nothing wrong with “keeping it real” when it comes to their financial picture. The $10,000 commission that a broker would make on a $300,000 home mortgage sounds intriguing. But what good would the commission be if the borrower couldn’t afford the payments? The home loan broker has a moral duty to their clients to serve them in the best way possible. This duty also extends to a fiduciary responsibility to both the client and the lender.

This responsibility fosters good relationships with both client and lender and will also result in repeat business. The client will seek out the broker for other financial matters such as financial planning and the lender will keep the broker on a shortlist for future loan relationships. This repeat business can also extend to the client’s friends and family as they will spread the word about their good experiences with the broker. That $10,000 commission that the broker missed out on with the upsell will be replaced by four or five $5,000 commission payments from the friends and family of the client.

Stew Leonard of the famous Stew Leonard’s chain of supermarkets in the New England area of the USA had a famous saying in relation to customer service, every customer is worth $50,000. This figure was in relation to how much the customer would spend in the store throughout their lifetime. If the customer experience was bad and that customer ceased doing business with Stew Leonard’s, then the store would lose out on those future earnings. In actuality, that dollar amount is a low-end figure because that’s not taking word of mouth referrals into account.


Home loan brokers should encapsulate good customer service and operate their service at the highest level. Conducting business on a ethical and moral compass will shed a positive light not only upon their clients but to the industry as a whole.

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Protecting Your Real Estate Investment

May 27, 2018 admin 0

Locks and security

Of all of the investments, we make in our lives one of the most important would be investing in Real Estate.

Once we have made that investment and bought our new home or business premises we need to be thinking how can we best secure and protect our investment, and how can we increase the value of our property without any expensive renovations? We should also consider how can we protect our family without paying for expensive private security or any of the other expensive security methods?

Your Local Security Consultant

The answer is very simple we need to call in a local security consultant who will come and evaluate the security measures on your property and then explain any areas that need improving and the security solutions we can use to improve them. Where do we find these security consultants?

Local security consultants are more generally known as a Locksmith. Many people have the misconception that your local Locksmith is simply there to cut your keys and to help you regain access to your property if you have lost your keys and are in an emergency lockout situation. In reality, a professional, certified, and insured locksmith is qualified to do so many more things, such as:

  • Install outdoor sensor light that will turn on when its dark, even when you are on vacations
  • Install motion detector lights that will turn on if someone comes within range of the detector
  • Installation of high security locks deadbolts and keyless entry systems.
  • Installation of CCTV Security Cameras with motion sensors.
  • Installation of double locks.

And much more.

Free Professional Advice From Your Local Locksmith

Your local locksmith will advise you of all of the security measures that he thinks could be improved with your property. Depending on the current locks that are installed in your property, good quality high security locks, the first security update the Locksmith will advise will be to have your locks rekeyed and new keys cut. If the locks are not modern high security locks then he will recommend having them replaced with modern high security ones. He will also be able to recommend various solutions to the other security measures that he has advised so that they not only make your home more secure but also fit in with your budget.

Locksmith Near Me

The easiest way to find your local locksmith is to simply do a search such as “locksmith near me”, in one of the many search engines. Depending on where you live this will bring up a number of locksmith businesses for you to choose from. So how do you know which of the multitude of locksmiths is going to be a good one?

The first thing to check is that the locksmith is a fully qualified and registered, any professional locksmith will be extremely happy to show you there qualifications because they are extremely proud of them. The next thing to check would be the reviews that the locksmith company has been given by previous customers of theirs. And then of course get a quote for the job from a number of locksmiths so that you can make an informed decision as to which one you would like to hire.

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Factors That Affect the Cost of Home Ownership

December 13, 2017 admin 0

First time homebuyers are extra careful in planning their budget. They consider a lot of things such as monthly house payments against their rent or lease payments. There is also the consideration of down payment. However, many of them tend to leave out some other crucial factors which often have a significant impact on their budget, and the price of house they can truly afford.

Increased Costs of Utilities 

Being your first time to buy a house, you probably want to move into a place bigger than your current apartment or rental home. Although it feels wonderful to get that extra space, it also requires more power to keep everything running smoothly and keep your home comfortable. Heating, air conditioning, and the cost of using more appliances can add up to your utility bills that might leave you surprised. Make sure you ask the home builder about the common cost of cooling, electric, and heating according to your lifestyle, including the usual prices for summer and winter months alike. If your utilities will cost 30 percent more compared to when you were renting, you can add this to your monthly expenses before you decide on the price of house your budget can afford.

Future Repairs and Maintenance

Whether you are looking at an older house which requires a few renovations, a house and land package, or a new display model, your future home will require regular maintenance and periodic repairs after some time. When you are renting, most of the repairs or maintenance are shouldered by the landlord. However, once you have your own place, you will be on the hook for the replacement and repairs of damaged or worn appliances. Months may pass with no repairs required but once they pile up, these could get quite costly. The same thing goes for maintenance like washing windows or painting walls. You can go DIY or hire experts to it for you. No matter what path you choose, you will still need to invest in materials and tools at the very least.

Different Mortgage Fees

Mortgage calculator will be able to give you a good idea of your monthly payments for mortgage but you still need to include other fees which your lender might charge to make up for the loan you go from them. These fees obviously add up too quickly. The good news is that these are only one-time expenses although these can still increase your initial payment or closing costs by a few thousand dollars.

Property Management 

In case your chosen builder provides townhouse developments, house and land packages in planned communities, or golf communities, you might need to pay a property management fee every month. These are the fees covering the price of care and management of common area and other amenities in the community. These fees can differ so make sure you raise this concern. 

Buying your home for the first time might make you feel intimated with all the potential fees and costs associated with home ownership so make sure you conduct some research first and set aside a complete budget before you make a commitment.

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Make Sure Your Home Or Condo Passes Roofing Inspection

November 18, 2017 admin 0

Advice On How To Pass A Roof Inspection Of Your Home

If you have minor roof leaks, there is no need to hire a professional roofing expert to mend them because you can always fix them on your own. Here is the best advice from on how to repair a roof, regardless of the size and material.

1. Repairing Shingles

If you have a flat roof, it’s easier to identify any problems with the shingles near the area where the water is leaking into your house. Remember that the source of the leak might be a little farther away from where the leak was actually spotted. If you have a slanted roof, inspect areas higher than where the leak was detected. Inspect your attic for water stains, mold or black marks. Run a hose on your roof and let another person alert you when there’s a leak inside the house.

Once you have identified the leak, look for missing, damaged or curled shingles since they are the source of the leak. Look for any roofing tacks that might be exposed too. Straighten out the curled shingles by softening the edge with heat from a blow-dryer. Avoid using an open flame since they are flammable and the excess heat will ruin the shingle. Reattach them once they are straightened with asphalt roof cement. Also, if there are any damaged shingles, you should replace them to avoid further leaks into your house.

2. Repairing Damaged Shakes

Get a chisel and hammer then split the damaged shakes. Remove the pieces by placing the chisel under the damaged unit. Remove the ends of any pried out nails using a hacksaw. You can also choose to work around the nails if you can’t saw without damaging the remaining good shakes. Cut off new shakes and slide them into place then seal using a caulking compound for the best results.

3. Roll Roofing

Start by inspecting for blisters or cracks present in the roofing material. If there are any, you should mend them. Use a utility knife to cut through the middle of the blister but avoid cutting the substrate found underneath it. Soak up or squeeze out any water found inside to make sure the area is completely dry. Spread some roofing cement on the loose roofing material and press it down. Once you have repaired the blister, you should hammer some galvanized roofing nails to it then cover the whole area with more roofing cement, including the nails for the best results.

The first step of repairing a roof is identifying the leaks present. Make sure you check thoroughly to avoid missing out any leaks that might do more harm to your roof even after you have done the necessary repair. Check the attic, the shingles and also your ceiling for any mold or water stains that might help you trace the source of the leak effortlessly. Next, you should use the right roofing repair materials to replace the damaged or broken areas. If you have some extra shingles, you can always replace the missing ones to avoid further leaks to your property.

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Top 5 Reasons Why You Should Use a Realtor to Buy a Kelowna House

August 14, 2017 admin 0

Buying a Kelowna House with a Realtor

Are you looking to get your own Kelowna Neighbourhood home and have no idea how to start? Well, there are many misconceptions flying around. The main one, however, is that you can save a ton of money by looking for and negotiating the price of a house without enlisting the services of a realtor. While it is possible to get yourself a good deal, there are many reasons you should use a realtor to buy a house. Here are five.

1. Pricing expertise – Most realtors are able to determine the real value of a house just by looking cursorily. They can know if a house is over- or underpriced. A realtor will help you save time by leading you to the properties that match your needs. In addition to the huge data on local properties, their experience on neighborhood transaction trends is an advantage you really want to exploit.

2. Handling the paperwork – People who’ve bought homes will readily admit that they have a whole shelf dedicated to the documents that arose from the transaction. In most instances, handling the paperwork is tiresome. However, when you hire a realtor, you not only cut on the time you spend on the documents but also reduce oversights that arise from unchecked
boxes and submitting incomplete documents.

3. Finding appropriate available properties – While most homes available for sale are listed on websites, a good number of properties from covert sellers are only known to realtors, therefore, hiring the services of one to buy a home broadens your search as well as the available property choices that are open to you.

4. Code expertise – Aside from the primary purpose of providing shelter, you may buy your house with a few other secondary uses in mind. For instance, the front parlor of a house situated on the edge of the business district can also serve as a candy store. However, this is only possible if the zoning ordinances allow you to use the house in that manner. Realtors have all these bits of information and will be happy to advise accordingly.

5. Counter closing problems – Certain pitfalls can kill a transaction only hours before closing. Examples of such pitfalls are unclear
titles, delayed financing, and incomplete renovations. Using a real estate agent helps you avoid such issues since these professionals can identify and sort the problems well in advance before they kill the deal.
You can shop for and buy a house unaided but remember that hiring a realtor when buying a house hastens the process and eliminates any problems you may meet along the way.

6. Refer Good Contractors-Your Realtor works in the community and knows the good businesses that can help you prepare your home for your family such as  Plumbers, Home inspectors, Carpenters, Movers, etc.



Top 5 Reasons Why You Should Use a Realtor to Buy a Kelowna House