A borrower has just found out they won’t be getting a prime rate on their loan.
There are many reasons borrowers don’t get a loan. Sometimes they lose their job suddenly, or maybe they’re new homebuyers carrying other kinds of debt. Whatever their reasons, they’ve come to you for help. But you can do more than just get them a mortgage – you can find a solution that gives them options and flexibility.
The Cost of Borrowing
Your client may not know what kind of pricing to expect when working with an alternative lender, so it’s important to set expectations early. When reviewing offers, ensure your client understands the total cost of borrowing and how rate and fee impact their monthly payment.
At Magenta, we balance rate and fee in a way that favours smaller monthly payments. Smaller monthly payments mean increased cash flow that your client can put towards other bills, paying down debt, reinvesting in their business or saving for the future.
We also capitalize our fee, which means your client doesn’t pay it upfront – the cost is added to their principal and spread out over the life of the mortgage.
Here’s an example:
Let’s say your client needs a loan of $450,000. Another lender is offering a rate of 5.99% with a fee of 1%. In this scenario, your client’s monthly payments would be $2,474.34.
Now compare this pricing structure to a Magenta. Magenta’s rate is lower, and the fee is higher, but the total cost of borrowing is the same. With a Magenta mortgage, your client’s monthly payments would be $1,924.83.
That’s a difference of $549.51 per month!
Of course, your client may prefer to balance their rate and fee differently. In this case, our team would be happy to discuss rate-fee offset options that ensure our solution meets your client’s needs.
There’s more to life than paying off a mortgage, and we design our solutions with this in mind. With their lower monthly Magenta payment, your client can use their increased cash flow to invest in what matters to them.
And thanks to you, they’ll be on track to a brighter financial future.