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Tips for Mortgage Brokers

Communication between brokers and lenders is essential for successful mortgage transactions. In order to make the mortgage magic happen, your underwriter needs to know your deal almost as well as you do. Providing your underwriter with clear, concise explanations up front can be the easiest way to ensure your file is underwritten quickly and accurately.

Here are 5 things your underwriter always wants you to explain when you submit your deal:

1. Credit: Squeaky clean credit needs no explanation, but if your client has missed one or more payments, let your underwriter know why, and let them know if the issue has been addressed.

Dealing with a credit-challenged file? Explain all credit issues from the outset along with anything that’s been done to repair the credit so far. If you’re arranging a short-term mortgage to address the credit issues, provide your underwriter with a clear exit strategy for your borrowers.

2. Use of Funds: Are you helping clients with an equity take out? Let your underwriter know what your clients plan to do with those funds. Whether your borrowers are planning to pay off unsecured debt, invest, send a child to university, or renovate their home, your underwriter needs to know.

3. Down Payment: Whether your borrowers are first-time buyers or purchasing their fifth rental, let your underwriter know the source and amount of the down payment. This is a critical detail that is often left out of submissions, and omitting it can lead to unnecessary back-and-forth when time might be of the essence.

4. Marital and Residential Status: These may seem like small details, but leaving them out of a submission can cause a headache or two. Unsure of marital status or residential status when the time comes to hit the ‘submit’ button? Address it in your broker notes. The key thing is not to leave it out of a submission without an explanation.

5. Other Income: When submitting a file with unusual or ‘other’ income, make sure to let your underwriting team know the source of that income, and what you intend to provide to show it. It might be pension income, investment income, Canada Child Benefit, or rental income, but whatever the source, include an explanation when you submit.

Details can sometimes make or break a file, but even brief explanations can save the day!

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About Magenta Capital Corporation

Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 24-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.
For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.
 

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