When a deal comes in through a broker or even a branch, the first thing you likely look to do is get the presented deal approved. You assume that the deal originator has collected all of the information, that the information is accurate and that the deal submitted is the best deal for the client.
In the case of refinances, information can often change or be incorrectly estimated as the deal originator is often relying on the information supplied by the client. While many clients try their best to provide accurate and complete data, many often don’t actually know, to the ‘thousand’, the value of their home or mortgage.
When underwriting your deal, one of the first things you may seek to do is to validate a property’s value to ensure that the value is not underestimated – you want to know that your deal is a solid one before you begin spending resources through the underwriting process.
Most underwriters now use an automated valuation model (AVM) as a fast and easy way to estimate property value because they are available online and can be generated instantly. Once you have your AVM and an idea of what the property is worth, next you may want to look at registered mortgages and compare them to the stated mortgage balance. It could be that the value is more than stated or the registered mortgage is less than stated.
In cases of a refinance, this could represent a valuable opportunity to upsell the deal.
At this point you can look at other attributes in the application like the credit report and outstanding debts – what debt has the deal originator included to be paid off? If none, perhaps they can use surplus equity to consolidate debt. Or perhaps the money would be a welcome opportunity for client to take on a desired renovation. Whatever the case may be, it could mean more for you.
If you work with mortgage brokers, looking for ways to upsell deals improves your relationships with your brokers because you are showing them that you are looking to help them find opportunity. This enables them to under-promise and over-deliver to their clients and potentially generate more fees, depending on the volume of the upsell that has been identified.
Your underwriting tools give you power. View them as opportunities, not just ways to mitigate the risk of wasting time and resources on bad deals but also as a means to finding ways to make the most out of each and every deal that crosses your desk.
At Purview For Lenders, we have those tools. Increase your own power today by visiting https://lenders.purview.ca/.