Mortgage Agent Training Series
To succeed as a mortgage agent in Toronto, you want to get an accurate and fast private mortgage approval for your clients. But how do you do that, especially when it comes to private lenders?
In this video, I’m going to be sharing 5 tips on how to do that, and how you can get approval for a private mortgage within 30 minutes! As a bonus, I’ll show you how to speed things up even more, by getting an approval without an appraisal.
Welcome, and thank you for joining me today. Victor here, I help mortgage agents elevate their business, especially when it comes to private lending. So, if you’re new here, consider subscribing to my YouTube Channel.
So, I’ve been asked often by mortgage agents, “how do you submit a private deal to get the fastest response?”
This is a great question!
Because private lenders have different underwriting criteria than banks. Banks are focused on the borrower’s income and debt service ratios. On the other hand, private lenders consider the equity in your client’s home above anything else.
Put Your Lender Cap On
So, put your lender cap on, as I show you how to think like a lender. What would YOU ask for if you were lending YOUR money?
Now, by “fast”, I don’t mean to skimp on the details. For example, I’ve received many emails, saying “Hey Victor, I have a deal in Markham. Client needs 80%. Can you do it?” That’s great, but something’s missing. Actually, a lot is missing. And I’m sure some of you viewers have seen this… Maybe even done this? No worries, we’re here to fix that.
So, when submitting a deal, follow these 5 tips to ensure you get a fast approval.
Here we go…
1. Describe the Property
Remember, a private lender focuses mainly on the equity of the subject property. So you want to present a clear picture of it, and it’s marketability. So answer these questions:
- Is the property “owner occupied” or a rental? If it’s a rental, what’s the rental income?
- Is the property a detached/semi-detached/ or condo?
- What is the condition of the property, if known?
- What is the purview or appraised value?
2. Give Details of the Requested Loan
Here you just want to give a quick snapshot of the loan.
- Is it a 1st or 2nd mortgage?
- What is the loan amount?
- Indicate the LTV (or loan-to-value ratio)
- What is the term length? Is it open or closed?
And for any other requests, such as prepayment, make them here.
3. Describe the Purpose of the Loan
What will the proceeds be used for? For example, is this a purchase or refinance? If it’s an equity take-out, provide the reason: debt consolidation, home renovations, or perhaps to purchase an investment property?
The lender wants to make sure that you’ve done your homework, and ensure there are sufficient funds for its purpose. The last thing anyone wants, is to find out there’s a shortfall at closing!
4. Tell the Story!
By explaining the overall scope of the deal, you’ll demonstrate that you have properly assessed your client and truly understand their needs. Some questions you can answer are:
Why does your client need to go private? What’s their situation? And what challenges have your clients faced?
For example, we recently funded a deal where a borrower had previously suffered a set-back in life, resulting in credit issues and mounting debt. However, their broker had set them up with a solid plan to rebuild their credit and consolidate their debt. Now, there’s nothing unusual about this situation. We see this all the time. But we saw a proactive approach, both from the broker and the clients. And because the clients also had sufficient home equity, we offered a prepayment option. Meaning, there are absolutely no payments for the duration of the term. Now they can focus on their financial recovery. And at the end of the term, they’ll be able to refinance with a bank or b-lender. And this takes us to the final tip.
5. (The most important tip) Indicate the Exit Strategy
As with the example I just gave, give the lender an idea on how your client will repay the mortgage at the end of the term.
What is the plan? Is it to rebuild your client’s credit? Refinance at a bank or b-lender? Or perhaps sell the home before the end of the term.
Whatever the end goal, you want to instill confidence that your deal is sound.
Remember, you’re wearing the lender’s cap right now. What would you want to know about the borrowers if you were lending YOUR money?
Now, I know this might sound like a lot of details, and can seem overwhelming, especially if you’re a new mortgage agent. But the reality is, it’s not.
All these details can be put into a 1-page summary. Many successful brokers include a summary with the app and credit bureau. It makes the underwriting process a lot easier.
In fact, we can often make a decision within 30 minutes, just on the summary alone. Brokers are often surprised how quickly we get back to them, especially when they have an urgent deal.
If you want to see what a summary looks like, drop me a message. And I’ll be happy to send you a sample.
Get a Fast Approval Without An Appraisal
Thanks for watching up to this point. As a bonus, I’m going to show you how to get an approval AND COMMITMENT without an appraisal. Because we know most lenders need one.
This can come in handy, especially if you have an urgent deal. We all know surprises can happen at the last minute, like financing falling through with a bank. And your client needs a fast private mortgage approval to avoid losing their deposit.
Under these circumstances, we can fund your deal within 24 hours.
By the way, this happens very often with realtors. And believe me, they get frustrated with the banks when they can’t close a deal! So this could be your opportunity to reach out to them and be their hero!
Now, for those of you who don’t know, we’re direct lenders, with access to direct funds. There’s no co-brokering, so you keep 100% of your broker fees.
So, here’s how you do it. If you have a deal within the GTA, we’ll fund up to 80% of the purview value. As long as the deal makes sense and there is sufficient data on the property.
Again, that’s up to 80% of the purview value. No appraisal required. It can’t get any easier than that!
And you can obtain a commitment in as quickly as 30 minutes, and fund in as little as 24 hours.
But remember, the key to getting a fast private mortgage approval for your clients is to follow the 5 tips discussed, and to have that summary.
Help Putting Your Deal Together
Finally, if you’re having difficulty with your deal, I’d be happy to review it and help repackage it.
Sometimes a deal is not doable because of what’s being requested. I could help make recommendations on what needs to be changed in order to get it approved.
So, if you’re ready to elevate your business to a new level, go ahead and contact me. The contact info is in the description below.
Thank you for watching!
If you found this information helpful, be sure to share it with your colleagues. Don’t forget to subscribe, and drop a comment on my YouTube channel.