Today’s mortgage broker is an evolved breed, taking on mentorship duties to get clients into better financial standing.
“It’s no longer one-size-fits all with mortgages, although one could argue it never has been, because as underwriting criteria becomes more complex, clients need advice about long-term strategies,” said Frances Hinojosa, managing partner at Tribe Financial. “They need additional advice about managing their debt and it’s our job to ensure we have full conversations with clients rather than just being product-driven. Now we need to be solution-driven.”
Getting a client into A lenders’ good graces is a tall order, and it could take as long as a decade in some cases. That’s why frequent check-ins with clients has become an essential facet of mortgage brokering.
“If you know, for example, you’re working through a strategy to move them from a private lender to the B channel, and then to an A lender, you have to put them in a better debt situation,” said Hinojosa. “How do you do that? For starters, you have more frequent check-ins along the way whereas a client who is in better position for the next few years requires fewer.
“Know your client, and not just that they need money for something. What’s their plan for the money that could otherwise make them debt-free or even improve their cash flow position? Ongoing dialogue is key and your initial conversation with a client should never be about interest rate. Sometimes brokers get scared of giving clients too much information or investing too much time in them, but what we invest in clients they invest back in us. It makes the process easier and it makes the client more committed.”
Chris Kolinski, a Saskatoon-based broker with Centum iSask Mortgage Brokers, emphasizes the importance of educating clients and, echoing Hinojosa, investing in them. Kolinski’s motto, “What’s your mortgage story?” allows him to custom tailor a plan for clients that’s replete with timelines.
“Now that the regulatory environment has tightened up and things have become harder, it’s about planning for the future and getting them into the right product at some point in the future,” he said. “It isn’t just start to finish; it’s the steps in between, too.”
Asked how he does it, Kolinski said: The ideal client for me wants me to follow up often. I follow up a couple of weeks after the mortgage funds, then every few weeks after.”
He dissuades clients from using their homes like bank accounts, instead encouraging them to think of their homes as savings accounts.
“Coaching starts before the new mortgage even happens,” said Kolinski. “If I don’t feel comfortable with them, I won’t put them into a private mortgage. Coaching starts at the outset and I outline a plan of how to get them to the ultimate goal, which is the A side.”
Some, if not most, clients welcome mentorship, while some opt for their brokers to take hands-off approaches. Hinojosa says determining how clients want to be mentored is a crucial first step.
“’Can I check in on you as a reminder that you should make a lump sum payment?’ Understand how they want to be mentored first, create those expectations upfront and live up to those them.”