In the mortgage business, mortgage underwriting and due diligence work hand-in-hand. Having the right mortgage intelligence could be the difference between a mortgage closing and not closing. There are so many reasons mortgages that appear to qualify don’t end up closing.
Most of the time, our customers do not intentionally mislead us and simply do their best to provide us with the information that we ask for. The mortgage intelligence we receive is a direct result of the questions we ask and how we interpret our customers’ answers.
When a mortgage application goes to the mortgage underwriting department at the financial institution you choose. They will perform due diligence that could include a search on Purview which is a tool offered by Teranet that tells the lender the approximate value of the property in question. They may pull a property title search to validate the information on title. They may also verify existing mortgage information with the customers’ bank before issuing an approval.
So the question is how can we mitigate the number of deals that fail to close?
First, the pre-qualifying questions we ask are key - here are some examples of the types of questions that you can ask to ensure that you have all of the correct mortgage intelligence needed to close your deal.
When you ask the client what their property is worth, ask them when they purchased the property and what they paid for it. If the purchase date was within 5 years of the date of the mortgage, likely the value hasn’t changed much and accordingly the balance is likely very close to what it was at the time of purchase.
If a customer tells you that there has been a vast increase in property value because they painted or did some landscaping, these are not the types of things that result in a drastic increase in property values. Things like an additional bathroom or a new kitchen are the types of things that would be expected to yield a slight increase in your client’s property value.
Finally, spending a little bit on a property title search when taking on a new client may save you huge in the long run. A title search is a mortgage underwriting due diligence tool that will tell you who is on title and also that mortgages are registered on the property and if there are any liens on the property. This type of information often rears its ugly head on closing which costs you, your lender and lawyer, time and money. This can be avoided with the right mortgage intelligence.
For more information about mortgage underwriting due diligence to create an enhanced level of mortgage intelligence, please call David Mandel at First Equity Financial by calling (416) 440-1224 ext 22 or by visiting www.firstequity.ca
