Why ignoring alternative lenders is a mistake: What you need to know
Are you aware that, according to CMHC, one in three mortgage borrowers are renewing their loans with an alternative lender? In today’s challenging interest rate environment, having an alternative lender in your contacts is crucial. If you haven’t explored this option yet, now is the time.
Not all clients fit the traditional banking mould. Some are self-employed, rebuilding credit, or have unique financial situations. These are the clients who need alternative lenders, and as a mortgage broker, you can connect them with the right solutions.
The alternative lending market OFFERS A NICHE OPPORTUNITY FOR BROKERS
Understanding alternative lending opens a niche market for brokers. By developing expertise in this area, you can better serve clients who might not qualify with traditional banks. Building relationships with alternative lenders is rewarding for both you and your clients, as it opens doors to homeownership that may otherwise remain closed. Although there is a bit more work in putting an alternative mortgage deal together, finding that solution is rewarding for both you and your client.
Clients who benefit from alternative lenders include:
- Self-employed or those with a non-traditional source of income.
- Investment property owners.
- Clients looking to purchase a second home.
- Those rebuilding their credit after a significant life event.
- Those with higher debt servicing ratios.
- Those dealing with a bankruptcy or consumer proposal
Alternative lenders consider the story behind your clients’ finances, making homeownership achievable for them. Expanding into alternative lending not only helps your clients but also enhances your skills as a broker. You gain insights into diverse financial situations and market trends, positioning yourself as a trusted advisor.
Alternative mortgages tend to have shorter terms, and your client will need to renew their term in a year or two, creating the opportunity to build a strong relationship. Stay in touch, whether you’re just checking in or offering advice. When the time comes to renew their term, they’ll likely seek your services again and may refer you to friends and family or provide positive reviews that will help you build your client base.
Working with alternative lenders like Bridgewater Bank offers benefits such as tailored support and resources for brokers. By fostering relationships with their business development managers and underwriters, brokers can efficiently navigate alternative lending options for their clients.
Embracing alternative lending expands your clientele and strengthens your reputation as a knowledgeable broker. Consider incorporating alternative lenders, like Bridgewater Bank, into your network to better serve diverse client needs and stay ahead in the competitive mortgage market.