As home prices remain high across Canada and interest rates fall, mortgage professionals operate in an ever-changing market where choosing between fixed and variable rates adds new levels of complexity.
At the recent National Mortgage Conference broker panel hosted by Mortgage Professionals Canada, five industry experts shared their perspectives on everything from market outlook and professional development to the rate debate fixed and variable rates, and even bet $10,000 on where mortgage rates might go over the next six months. .
Here are their key takeaways for the industry today and next year:
2025 will be a good year for brokers
Now that mortgage rates are falling, homeowners are either looking to get in the market or refinance at a lower rate. This means more work for mortgage brokers.
“As prices stabilize, I think volume will increase. I think 2025 will be a better year for us than 2024,” said David Larock of Integrated Mortgage Planners.
Clinton Wilkins, team leader of the Nova Scotia-based Clinton Wilkins Mortgage Team, estimates his company’s business could grow another 10 to 12 per cent next year.
Ron Butler, of Butler Mortgage and host of the Angry Mortgage podcast, went so far as to bet $10,000 that conventional mortgage rates over the next six months would fall to 3.89%.
“The mortgage industry is a cyclical industry, if anyone hasn’t noticed,” he said. “Next year everything will be fine. This year is bad. Instead of worrying, Butler suggested brokers accept the cyclical nature of the mortgage industry and look forward to boom times, while accepting that some years will be disappointing.
However, simply waiting for the Bank of Canada to readjust its overnight interest rate is not enough for brokers looking to take advantage of a thriving mortgage sector.
Jill Moellering, a broker, team leader and trainer based in Edmonton, said many brokers who started in 2020 made easy money at first, but then struggled because they didn’t have developed their business strategy or were not informed about mortgage policies and products.
“Don’t give up if you’re new to the industry,” she said. “Just put in a little work and take the time to perfect your craft.” »
Referrals are the best marketing you can hope for
When business slows, it’s easy to disappear down the rabbit hole of social media marketing, but brokers agreed that flashy Facebook ads or TikTok posts don’t significantly boost their business.
In fact, Moellering says she doesn’t spend money on advertising. All of its customers come from word of mouth or referral partners. “It doesn’t have to cost you anything to grow this business,” she said.
Wilkins estimates that about 60% of his customers are loyal and that marketing specifically targeting these customers can be very successful. “Mortgage brokers in general want the easiest path to the finish line, but we forget that our clients are sometimes our best champions,” he told the panel, “and it is much easier to work within an existing client sector.
Brokers can’t just sit back and expect referrals to come automatically; Building a referral network takes work.
In Moellering’s case, she spent time in Facebook community groups simply to answer questions about homeownership.
Butler, somewhat ironically, had a much less strategically viable plan: “Go on TikTok and sweat. Seriously,” he declared, to laughter from the room. “That solved everything!”
Brokers face a choice: financial advisor or business-focused approach
Many mortgage brokers today see themselves as financial advisors who can guide their clients through one of the biggest purchases they will ever make.
A half hour on the phone during big financial news can calm a worried client, even if it doesn’t put more money in the broker’s pocket that day. Most panel members agreed that time spent with clients can be rewarded in the long run.
“For me, the value of every interaction is in creating referral sources,” Larock said. “Every morning the phone rings. Sometimes there are deals, and sometimes I just help people.
For Larock, helping clients understand their financial options is one of the best ways for brokers to retain customers. A well-informed customer is more likely to return for future purchases and refer friends or family, which drives long-term business growth.
However, staying fully informed about the latest economic news and trends comes at a price.
Butler, a longtime media commentator, said there is nothing wrong with brokers deciding not to act as financial advisors to their clients. He described these brokers as “technicians” who can get the best possible deals for their clients.
However, those who do should expect to read about “20 hours per week” in addition to their workload. “If you want to become that kind of subject matter expert, you have to spend time reading and learning,” Butler said.
Don’t assume you know everything, but always be ready when customers call.
Falling interest rates pose a dilemma for fixed-rate mortgage holders looking for a better deal: Is it worth breaking their mortgage, switching to a variable rate and paying the penalties? associated?
Butler encouraged brokers to reach out to clients with rates between 4 and 5 percent who may have an opportunity to benefit from lower rates, making sure to provide an honest assessment of penalties and potential savings. “And there will be money made,” he said.
Larock, on the other hand, cautioned the audience against persuading customers to move to an adjustable-rate mortgage if they are better suited to the stability of a fixed rate. “We can’t see around corners. We don’t know what the future holds,” he told the panel. “We don’t want to project confidence when we don’t have a right to it.”
Wilkins noted that brokers should be ready for these discussions, as the fixed versus variable dilemma will be a priority for many new buyers and those renewing their contract in the years to come. He pointed out that while not everyone understands the potential costs of terminating a mortgage early – which can run into the tens of thousands – some customers may still choose to continue, shopping around for a lower rate. lower.
“These difficult conversations are going to happen, just wait,” he said.
Philippe Béland, a broker based in Quebec, stressed that these difficult conversations are not even that new. “That’s why you need to be very transparent when you’re looking at 5-year fixed penalties,” he said. “In 2021 we granted far too many variable mortgages and had difficult discussions with customers. »
Don’t worry about technology, unless it’s holding you back
Brokers often hear that they need the latest tools, from mortgage CRMs to private ChatGPT servers, to keep their workload under control.
For Wilkins, the best technology a broker has is the one they use. “I think you have to choose your path and be consistent,” he told the panel.
Spending all your time testing the latest tools can quickly eat into the time you spend closing deals if you’re not careful.
Moellering shared the story of a broker who tested five different CRM platforms, while only closing about 10 mortgage transactions during the year. For her, the main thing is her phone and a submission platform. “Technology should be used to improve your world and take work away from you,” she said.
Larock emphasized that it’s okay to not be the most tech-savvy broker. In fact, he believes technology can sometimes interfere with the personal touch that sets a broker apart.
“For me, the magic happens when I talk to my customers,” he said. “Any technology that stops me from doing that or reduces the time I spend with my clients… doesn’t exist.”
Visited 555 times, 555 visit(s) today
panel of brokers advice to brokers Clinton Wilkins Dave Larock jill marrow mortgage broker mortgage broker how to do mortgage professionals national mortgage conference of canada Philippe Beland ron butler
Last modification: November 3, 2024