What exactly does a Mortgage Broker do?
We spoke with Urbaneer's go-to mortgage master Jake Abramowicz, and here's what he had to say!
Thanks for asking, Steve! It's an excellent question because a lot of people have no real idea what my job entails, how I get paid, and why I do what I do.
Let's start with what I do.
I've been a Mortgage Broker for a very long time - almost 18 years now! I've loved it from the first moment because no two days are the same for me. Every mortgage broker has a different workflow and process but here's a brief summary of the various roles I play when brokering deals:
• Marriage Counsellor
• Risk Analyst
So, in no particular order...
We all know that buying a house is the single most expensive (and perhaps most stressful) experience in our lives. Imagine living that through your clients about 250 times per year, if not more. As someone who thrives on pressure, stress and risk, I personally love it. However most of my clients are very anxious, scared, nervous, excited, happy, and relieved when they buy, so there is a myriad of emotions I manage when we work together. That's where the Psychologist part comes in.
Oftentimes in our brutally competitive market, I also play the role of the appraiser. I have to tell someone they can go firm on an offer, and I'm the one holding the risk if their deal falls apart. I take the onus and responsibility of doing this and having done this so long, I can tell you that without my Realtor partners, I could not do this part very well. With their help, I can tell someone, "Go for it - you'll get the property if you pay X". My appraisers then back me up when it's time to get the place appraised.
Many of my deals are with couples or multi-generational families. You can only imagine when dealing with two or more people borrowing hundreds of thousands of money when different opinions come into play. You can only imagine when one party does not disclose something but it comes out - like a debt, or, missed taxes, or, any other financial misstep - what that does to the relationship. And, I cannot begin to tell you how many times one party of the relationship wants to be "in command" and sometimes pushes the other party out of the way. I have to present to both sides and I get great satisfaction out of empowering all parties and making sure everyone understands what's going on. Marriage and family counseling for free!
"Should I buy this?" is a question many people ask me. I look for all of the potential pitfalls of buying: Starting a family? Changing jobs? Coming into wealth? Risky investments? Over-leveraging yourself? Under-leveraging? Risk analysis is one of my main goals and functions of brokering. Without it, I'd be pushing paper and nodding my head in agreement. Many times I've come out and said "I disagree with this idea" whether it's going variable vs fixed, or even buying a property. My experience leads this conversation from other deals I've seen and often times it has saved people.
Negotiator! Between myself and client, myself and Realtor, and myself and lender/bank. It is a constant negotiation: rate, term, amount, and most importantly, getting an exception. (An exception is when you ask a lender to agree to something "out of the box".) Negotiations are a huge part of my workday - I've learned when to push and when to pull in order to get what my clients need - in the most civil way possible!
Finally, underwriter. I still underwrite all of my deals. It takes me 10 minutes per file but this way I get to know the deal inside out. I see credit, income, down payment, and I send it all off to my lenders. I am known in the industry as being a great note writer, where when I send the deal, I present a thorough business case even if the file is simple as ABC. I want my lender to know WHY should they LEND these people the money.
I get paid a commission by the lender based on the rate, and term, they pick. I work hard for my clients and present them with a ton of value. I often discount my rates using my commission in order to compete. I rarely charge fees unless the bank is asking for a fee, which is very rare and most times found in the alternative channel and/or when I place a deal with a non-mortgage broker friendly lender.
In a nutshell, that's what I "do". I try to educate, empower and get people approved. I want to give them hope that they can achieve homeownership if they want it. And the best part is: This is absolutely the best job I could've ever somehow been lucky to get. I don't see myself stopping because the natural high I get when I call a client to tell them they're approved is simply irreplaceable.
Thank you, Jake - you're an amazing resource and always have great advice!
For more on the professionals who assist in real estate transactions, try:
Curious how much you might qualify for? Financing Your Toronto Real Estate Purchase? There's An App For That!
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Thanks for reading!
-The Urbaneer Team
Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage - (416) 322-800
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