Many millions of words have been spent on changing behavior. Changing beliefs is perhaps more touchy of a subject.
We humans have a collective batch of behavior that we know to be good, and another batch that we know to be bad. Categorizing these logically is simple, behaving accordingly less so. If we had to sit in front of our parents, our children, our spouses, or our friends and label various behavior either good or bad, it would be a simple task for the most part and there would be a significant consensus among us all. For instance:
• Being polite
• Flossing daily
• Exercising daily
• Eating too much (any) fast food
• Starting fights
Yet as simple as making such a list would be, as strongly as we may want to align our actions with our words, we all tend to live a self-created reality somewhat different from what we would agree on paper is in fact logical.
It would seem that we are not all Spock.
Why is it so hard to change our behaviors if we know a certain behavior should be added or deleted? The root cause of behavior lies in belief.
Smokers may know logically that smoking has high rates of cancer, heart disease, erectile dis-function and sorts of nasty things, but smokers simply do not believe that they will be in the group that suffer any such maladies. They believe that they will be just fine. It is only when this belief is shattered through a significant encounter with the medical system that most alter their behavior.
So it goes with the tales of many a man caught on a flight of stairs thinking he may be having a heart attack. In that moment he faces not only his mortality, but the many thousands of cheeseburgers, fries, and milkshakes he’s consumed, and his belief of immortality is shattered. For many, this leads to a radical change in behavior, for others, a certain acceptance and a sort of throwing in of the towel.
If you have a behavior you want to change, dig deeper to the core belief that is preventing you from changing. Are you ignoring statistics? Are you looking for the easy button?
There is no easy button.
Anything worth doing is worth doing well, and doing something well takes effort. Often great effort.
I spent a few years of my life, perhaps longer, thinking that I would never belong in any sort of corporate job. My belief was that all men who wore suits, had a corner office and attended ‘important’ conferences downtown had university degrees, and since I did not have one I would be forever eliminated from contention for anything other than a blue-collar job. I would be a body in an organisation, never a brain.
Then, at age 36, I had one small comment from the past bubble to the surface of my mind, it was made during a business meeting a decade earlier I was asked ‘what university did you attend?’. Being 26 years old and rather proud of what I had achieved at that time, I responded quite honestly that I had in fact not attended university at all. The look on the man’s face said it all, as did the notable shift is his demeanour following this revelation. I had gone from a welcome prospect at the English country club we were sitting in to an outsider, in the blink of an eye.
At the time I took this a bit hard, internalising it as additional support for my belief that within the corporate world there was no place for the likes of me, a lowly high school grad.
But years later when this comment came back to me, it was a bit of a turning point, much needed at the time. I realised that this person’s perception of me for some time was that I had attended university. I had shattered his belief of who I was, and thus changed markedly his behavior toward me. The real revelation for me was that I had inadvertently fooled this well-educated individual into thinking I was an equal. How did I do that?
It seemed to me that it was from a combination of regular reading, writing, and perhaps my verbal sentence structure. I have always been a voracious reader; I have always written journals and letters – more recently posts and articles. Also the wonderfully complicated English language with all its nuance, double and triple meanings, irony, sarcasm, wit, tone, inflection, etc. has always been of interest to me.
So I could at the very least fit in – but perhaps I could do more than that. After all, how material in day-to-day dealings is a 20- or 30-year-old degree in a world changing at the pace that ours is today? Of little I would suggest without ongoing self-education.
Suddenly, my belief that a university degree separated me from the corporate world changed. My current belief is that we are all self-taught in today’s world, and that a dated degree is in many professions a far weaker foundation than that built of the most recent fifty books on a specific topic, all read within the past year. No doubt those with degrees have a leg up in the skills of researching, reading, and writing. These individuals have likely learned the most important lesson of all, how to learn – a massive head-start for sure.
However for someone who believes in their own ability to learn, to absorb new data and to form new viewpoints on varying topics – therein lies their power to truly change their behavior.
Change your belief in yourself for the better, your behavior will follow suit.
The results will speak for themselves.
Dustan Woodhouse, Mortgage Broker, AMP
Dominion Lending Centre
Author of ‘Be The Better Broker’
If you enjoyed this post you will love his Blog – dustanwoodhouse.ca/blog
Vast majority of brokers focus primarily on the A channel finding the occasional need to venture into the
Things in that realm are rapidly changing. With increasingly stringent qualifying rules, private money can
be the difference between making or breaking a deal. Most brokers who don’t primarily focus on private
money often approach private money the same way they would an A lender. That can be a big mistake.
Here are a few tips and tricks which should help you bring your A-game when it comes to sourcing
private money for your clients.
Less is often better
One of the biggest mistakes I see brokers make is submitting (or forwarding) a package similar to that of
an A-file. You would be pleasantly surprised that most private lenders have little to no interest in seeing
NOA’s, Payslips or a letter confirming a return to work. In fact, some private lenders don’t even require a
I can’t tell you how many times I’ve learned this lesson the hard way, submitting an app, bureau and
appraisal only to find the lender declines the deal due to a 522 beacon, then on the next file approving
the deal without ever requesting or seeing a bureau.
A good rule of thumb, unless you already know your specific lender requirements is to simply start with
an email outlining the deal, what it is your client is looking for, and a request as to whether it is a good
fit for you lender.
Generally speaking, the most you will require on a private file is an app, bureau and appraisal. Unless
you already have an appraisal in hand, hold off on ordering one, because just like with A lenders, you
will likely find your lender requesting their preferred appraiser.
Of course, exceptions can sometimes be made on appraisals, if you already have one, don’t be afraid to
ask. MIC’s and other funds will generally always require the CB, but not always so for individual private
Ratios are usually not much of a factor and income is accepted as stated unless there is some good
reason to doubt client’s ability to service the mortgage payments.
Don’t be afraid to negotiate
Unlike institutional lenders, private lenders have no ‘set in stone’ fees or rates. Many times A brokers
will simply accept the first offer and if the client accepts move ahead or collapse the deal. Don’t
automictically assume rates and fees will be similar among privates, you will find they vary vastly.
The beauty of private money is there is plenty of flexibility. Don’t hesitate to negotiate the fees, rate,
and terms. Usually, the first offer will be the highest and worst. Private lenders are accustomed to
negotiation and won’t be offended if you ask. Besides, what’s the harm in asking?
Rates and fees are normally adjusted based on the security. For example a client with excellent credit
and provable income who simply does not meet the ratio requirement might receive more favorable
terms than a client with poor credit and purely stated income.
One caveat, however, is that you should know your client’s ceiling when it comes to rate and fee
upfront. This way you will be equipped to negotiate real time. Too much back and forth can sour the
deal not only your lender but your client all the same. If you can exceed your client’s expectation on rate
and fees even better.
Build up the arsenal!
Avoid simply limiting yourself to working with one or two private lenders. If you get stuck on a deal pick
up the phone and start calling around. A good source of lenders is the MIC directory.
Even if the lenders you are calling aren’t a good fit, they will provide you with invaluable information for
future deals. Ask as many questions as you possibly can, put together a list of questions before calling if
possible (not just relative do your deal).
You may learn valuable information about the lender that will be useful for future deals and your lender
matrix such as whether that lender will lend only on the higher of the purchase price or will accept the
appraised value, if they have any specific niche offerings.
Often, if a private lender cannot do your deal, simply asking that lender to suggest an alternate lender
that might be a good fit can prove invaluable. Private lenders know other private lenders, keep calling,
there is always excellent information to be had when speaking with private lenders, even if you have
used them before you may learn something new, networking is key.
When dealing with institutional lenders the requirements are pretty well uniform across the board with
some minor exceptions, in the world of private money, it is not so. Each lender is unique and has a
unique set of underwriting criteria and plenty of flexibility.
Having access to and knowledge of private offerings not only gets your deal done but sets you miles
apart from the crowd. ‘Pocket lenders’ and having access to unique product offerings will also allow you
to close on deals other brokers simply cannot.
Don’t be shy on fees!
Sourcing private money, until you have built your arsenal (and even then) can be a cumbersome task,
that doesn’t mean you shouldn’t be properly compensated for your time. As a general rule, the harder
the file, the more you should charge.
Don’t allow yourself to get trapped in the ‘100 bps’ frame of mind. If a client calls and is asking you to
source 75% on raw land in a rural community, be confident you can place the deal, but for proper
compensation. After all, you could spend a few hours on that deal and not get anywhere, hence, your
efforts should be adequately rewarded.
Be very clear and upfront about your fees, let the client know if the deal is hard to source you will want
to be paid accordingly. If a client approached me with a deal using the above example, I wouldn’t quote
anything less than 3% as a broker fee, I know a lot of calls will be in order.
On the other hand, if you have a client looking for a 50% LTV 1st on a property located in a prime urban
location, a low fee may be appropriate as it probably won’t take you that much time and effort.
Of course it is all relative to a loan amount. 100 bps on a $60,000 second shouldn’t be worth your time
(unless you are making it up on the 1st) so a minimum may be appropriate. Personally, I target a
minimum fee of $3,500. If the deal is a ‘slam dunk’ I may lower that to $2,500.
Either way set your targets, be confident and never sell yourself short.
Know what matters!
Generally speaking, only three things really matter to a private lender.
1) The property – location, value (LTV) and size of existing mortgage (if any) the lender is going
2) Payments – how will the client make the payments. Doesn’t have to be comprehensive, simply a
common sense explanation as for how the client will afford the payments.
3) Exit strategy – How will the client repay the loan. Private money is a ‘band-aid’ solution, it is
usually never mean to be a long-term solution so exit strategy is key. Your lender will need to
know how your client(s) will exit.
Credit, ratios, use of funds and other factors certainly can impact your deal, however, none are as
material as the three above.
Alex Khalil, Mortgage Broker,
Dominion Lending Centre
If you enjoyed this post you will love his Blog – www.alexkhalil.com/blog
Alex Khalil is a private lender of 15+ years and broker whose primary focus is private money.
So we’ve all heard the stereotypes about millennials. People say they’re lazy, they stay at home with their parents so they can spend their money and time out at clubs, they don’t want to get jobs, the list goes on.
But is this really true? Of course not. A number of recent studies have broken down just why it is that so many millennials are unable to get out of their parents’ homes and into the real estate market.
Millennials – Entitled? Or Just Thrifty?
A recent study of millennials in Metro Vancouver shows that these young people are spending less on leisure products like alcohol and tobacco than their early adulthood counterparts in the 80’s and 90’s. Instead, over 30% of Vancouver millennials who are staying with their parents are reportedly saving over half their income in order to one day afford their own place. Of these at-home millennials, 57% report that living with their parents is the result of not being able to make enough to pay rent elsewhere.
So much for lazy or entitled. Skyrocketing real estate prices in Vancouver, it turns out, have essentially left these 20-35-year-olds with no alternative but to live at home and try to scrape together enough to one day get into their own place. In fact, studies have also shown that young people in the 20-35 age range spend 30% of their income on rent, which is higher than any other demographic. Add this to the cost of transportation, which makes up between 16 and 22% of their income, and you get as much as 52% of millennials’ income being consumed by basic living expenses.
No wonder they aren’t flooding the real estate market!
Down Payments & Credit
For the millennials who do manage to put together money for a home, there arises the issue of financing. Getting into a home is a complicated process which typically requires mortgage loans, but how many millennials have the kind of impeccable credit banks are looking for?
Millennials are a generation who are all-too-familiar with debt. The average Canadian student graduating from university carries $27,000 in debt right out the gate. Additionally, let’s not forget that this is a generation which was very much present for the financial meltdown of 2008. This combination of factors has, understandably, left millennials extremely gun shy about accruing credit debt.
As a result, millennials are far less likely to own or use credit cards. 63% of adults between 18-29 do not own a single credit card, with an additional 23% only owning one. This means that a huge percentage of millennials have either bad credit or none at all, with a study at NerdWallet pointing out that this generation has the lowest average credit score of any age group.
So, for the millennial who is able to put together some cash for a home, they run into the stumbling block of trying to qualify for a home loan without credit.
The Daunting Labyrinth of Real Estate
Despite the financial challenges young people are facing today, some of them do manage to put together enough savings to find their own home. But what happens then?
The real estate market is not always the simplest or easiest thing for inexperienced people to navigate. As a result, there are an abundance of services available to help people new to home ownership, from brokers and realtors to bankers and loan companies.
For millennials, however, this confusing landscape presents a significant challenge. For one thing, the service of a broker to help with home purchasing adds to the overall cost of owning a home; a cost which many millennials can barely afford as it is. Additionally, millennials, more than other generations, tend to be leery of real estate experts, again as a result of the 2008 real estate catastrophe which looms large in their collective memory.
Without a guide to navigate the real estate market, a lot of millennials simply stay away, settling for rentals and apartments.
So That’s It then?
Despite apocalyptic reporting and headlines like “Millennials are ‘Generation Screwed’ When It Comes to Real Estate”, reports also indicate that an overwhelming majority of millennials still feel that homeownership is a valuable concept and an important measure of success. To those millennials, the takeaway should be this: the forecast may be dark and times may be difficult, but hope is not lost.
Recent changes in fiscal policy and real estate law have added some tools and options for first time buyers, particularly millennials. While prices in Vancouver are expected to continue to rise, we’ll cover some options for millennials looking to find a way into the real estate market in our ongoing segment on millennials and real estate. Stay tuned!
Tracy Valko, Mortgage Broker, B.A., AMP
Dominion Lending Centre
If you enjoyed this post you will love her blog – tracyvalko.ca/blog/
Who do you represent?
In Alberta, at least we have very clear guidelines about who we represent in the mortgage transaction, so clear in fact that we have three different forms that can be presented. The core duties are the same for all three, be honest, exercise care and skill, gather the required information, disclose and explain options to them, complete and submit information to the lender and keep all parties informed of progress.
The first is where we act as an intermediary, this means that we do not represent the borrower or the lender. In fact, it also means that we are merely the paper shuffler between the client and the lender, we do not verify any of the documents and we are technically not allowed to advise the client either. We can discuss and explain the options but we must leave the final decision to the borrower and for that matter to the lender.
The second is very different and that is when we are acting for the borrower, here things change and we are agreeing to represent the borrowers best interest, recommend a particular mortgage solution, advocate on their behalf, provide accurate and clear information so that our clients can make an informed decision. Our core responsibility is to the borrower but does not reduce the responsibility to lenders, as we still have the core responsibility to them to be honest and efficient.
The third is where we as brokers represent the lender, this is more relevant in the private lending world. If you represent individuals who lend their own money through you then you must represent the lender. Clients need to be advised to seek independent advice from either a lawyer or another broker who is skilled enough to advise them on the offering. This doesn’t necessarily apply when dealing with MIC’s or Syndicated lenders, at least in Alberta, as most of them are already brokerages and under the same guidelines. This scenario also comes into play, in my personal opinion, when you send all of your business to one lender and do not shop around or at least research for the best rates and features for your client.
In my brokerage, we have chosen to represent the borrowers as we feel the team is skilled enough to take on that responsibility.
Who do you represent or do you know?
Len Lane, Mortgage Broker
Dominion Lending Centres
Check out more great blog content from Len – http://www.brokersforlife.ca/blog
TRANSFER OF TRUST. I was introduced to this term about a year-and-a-half into my mortgage broker career by a very well-known and respected broker. Needless to say, it has shaped how I run my business. It’s the very foundation and basis for all the decisions I’ve made and will make going forward.
Up until that time, I was scrambling to get business. There was no rhythm or reason for how I was getting leads. I had no plan.
After I heard the term it was like a light switch was turned on. I had moved from first to second gear and I could feel everything start to accelerate. After I cemented the term in my head, it became extremely obvious what I had to do next. I needed to go meet like-minded professionals that over time I could learn to KNOW, and eventually LIKE, so that we could TRUST one another to share business.
That was my TSN Turning Point.
TheTRANSFER OF TRUST requires basic fundaments of KNOW, LIKE and TRUST. If these three boxes are checked it’s impossible for business to not happen eventually… and naturally. Nowadays there isn’t a single name in my book-of-business that doesn’t come from a pre-existing relationship, either past client or professional referral source. Every year from 2012 to 2016, 76.21% to 94.12% have all originated from someone that I had a pre-existing relationship with. The exception is this year: to date 100% of my files have come from someone that knows me, likes me and/or trusts me.
What is the best form of business/potential client in our line of work? Is it one where the call or email originates from an ad placed at a public bus stop and invariably starts something like, “What is your best rate…?” Or would you prefer to conduct business with potential clients who say something like, “My friends Jane and John Smith we so impressed with how you assisted them with their recent financing request that they highly recommended I call you to discuss my financing options.”
This is an absolute no-brainer.
If I had to choose between two files, only knowing the potential volume and source of the business, without hesitation I would choose the business from a past client or personal referral source, even if the volume was significantly higher from the bus stop ad. In my eight-year career, only 1.77% of my completed files have originated from Google or another outside source.
Never say no to a mortgage, regardless of the amount. I just recently completed the smallest mortgage amount of my career, $50,000. The amount didn’t even faze me because I knew if I gave that file the same love and attention as an $800,000 file, there would eventually be an opportunity for that client to pass along my contact details to a friend, family member or colleague in need of mortgage financing. Lo and behold, it took all of 4 days and my client had referred me to a colleague of hers. The couple were buying their first home; the mortgage amount went up tenfold. The client LIKED and TRUSTED me, therefore she referred me.
Think about how you generate business and how your time can be used more efficiently. I don’t lose my clients to rate very often; it’s generally because they have decided not to proceed with the transaction. And because we’ve worked together once, I still consider these almost-clients in my pipeline. Every working relationship can result in a referral.
Michael Hallett, Mortgage Expert
Dominion Lending Centre
If you enjoyed this post you will love his Blog – hallettmortgage.ca/blog
“Life is 10% of what happens to you and 90% of how you react to it.”
Charles R. Swindoll
Seeking Peak Performance.
Pushing for peak performance has always interested me. Not world-record level peak performance per se, more simply just pushing ourselves to new personal and professional bests.
A world in which each of us is constantly striving for all encompassing improvement is a truly remarkable world to be a part of. Create a world like this around yourself.
truth: we are all capable of so much more than we believe ourselves to be.
During 2014 I was lucky enough to give a dozen presentations across Canada, eight of them to a collective audience of 1,402 Mortgage Brokers in particular
The main focus of each presentation was the ‘nuts and bolts’ of file processing. Each presentation began with a real-life illustration of personal peak performance, striving to do better, and remaining optimistic. It was the story of one Meredith Fitzmaurice.
I paraphrase below from various accounts.
On Sunday, Sept 22, 2013, Meredith Fitzmaurice entered a half-marathon in Belle River, Ontario. Nearly 90 minutes into the run she asked an official riding his bike along the course how close she was to the finish line. She learned that she had in fact missed the turnoff to the finish of the half-marathon course and was now on the full marathon course.
With the realisation of this error, Meredith did not simply stop and call it a day, or worse a mistake, or worst of all a failure. Instead, Meredith’s first thought was to run an even 20 miles, her previous furthest distance, calling the day’s run ‘training’. Never having run 26.2 miles previously nor entered a full-marathon this seemed a reasonable compromise. At first.
Key Point: Mindset is vital. In the face of missing out on a potential win of the half-marathon Meredith seamlessly embraced the positive view: this would be a great training run.
Meredith then noticed only nine men ahead, and no women. At this point she asked the official on the bike if she could switch categories mid-run, and her plans shifted once again. This might now count as a qualifier for the Boston Marathon, a goal Meredith was striving for. This ‘mistake’ was proving fruitful.
The race director approved the request to transfer Meredith to the full marathon category mid-race. Without breaking stride, Meredith went from having made a wrong turn, to being on track to win her very first full marathon and to qualify for the Boston Marathon. Although she had concerns about leaving her friend waiting and wondering at the half-marathon finish line, Meredith pressed on. She asked the race official on the bike if he would mind keeping her company.
Key Point: One who asks, receives. One who asks nothing, receives nothing.
Having only ever run 20 miles previously, she was concerned about pushing the extra 6.2 miles, yet Meredith finished with a time of 3:11:48: the fastest woman of the day, and in 10th place overall.
And she qualified for Boston.
Meredith’s first action upon crossing the finish line? A teary eyed hug for the guy on the bike, and making it known that without him she would not have made it.
Key Point: Few of us cross the finish line in anything alone, fewer winners still. An attitude of gratitude established long before stepping up to the start line is crucial when it comes to being first at the finish line.
I feel that this story perfectly embodies elements of life in general. We all take wrong turns, but how we adapt is everything. Learning to adapt quickly and positively to change is a vital skill. And perhaps most crucial of all is having that ‘guy on the bike’ along with us. In whatever form that takes, a support system is vital.
This sentiment will ring true on a daily basis with any Broker as well.
Conclusion: we are all capable of so much more than we believe ourselves to be
Dustan Woodhouse, Mortgage Broker, AMP
Dominion Lending Centre
Author of ‘Be The Better Broker’
If you enjoyed this post you will love his Blog – dustanwoodhouse.ca/blog