Dating Real Estate and your Mortgage Broker

"What is a mortgage broker?" said nobody during my high school career fair.

Well, thanks to the UBC Sauder School of Business, now I know the official version and have the paper to prove it.

But that's boring. Let's assume that nobody under 21 is interested in reading this, because let's face it, mortgages are a pretty dry subject matter. But not if we compare mortgages to your sex-life, which I am pretty confident nobody ever has but for the sake of argument, I'm going to give it a try.

Getting a mortgage, much like getting laid while single (or if already in a relationship, getting involved in a three-way) is a tricky slope; we have all been down the soul-sucking route when looking for prospective mates, from puberty through your 20's and on and on until you find that right someone you were meant to be with. So it is with real estate.

But much like reading Maxim for dating tips isn't the same as actually dating, just saying you are a mortgage broker isn't the same as actually brokering mortgages. Our (my) business is built on referrals, much like most blind dates are. Some blind dates are good, some are bad. And the best are the ones when you wind up being completely compatible with each other and live happily ever after.

This has 'bad idea' written all over it.

Being a mortgage broker, much like dating, takes practice. It takes an understanding of the market and a client's needs and wants and the ability to find a good match when it's there. It's knowing the good from the bad, striking out and making out. It's finding out if it's wine and cheese or beer and hot wings.

Consider Mortgage brokers your pseudo-financial wing-man. We are there to help you find out if that hot piece of house you have been eyeing up on that corner lot will bring you some type of relationship fulfillment or just break your heart (and bank account) in the end.

That's your mortgage broker on the left.

When you (and your partner, if applicable) first decide to make yourself available you are amazed at the options out there. There's potential on every street corner, back alley dive and downtown condo block party. You think it's a great time to be alive and let's get this party started! You go buy a pack of condoms because you're not a fool. You want to commit, but not to the first house that opens their door to you. But now that you are ready to party, you realize a lot of options may not be available to you. You might go online or ask friends and family if they 'know of a place'. Right now you are just looking, not too serious. 

This also has 'bad idea' written all over it...

Someone might refer a Realtor that will go 'double-dating' with you and wants nothing more than to help you metaphorically get laid. You go cruising the 'For Sale' signs and see right away that some of them are way out of your league, some are of no interest to you at all. The easy ones hanging out by the bars are easy to get into but might have a lot of baggage attached to them. Can you handle that type of relationship, one that is always taking but never giving? Some buyers thrive on that, can see the diamond in the rough with just a little work and elbow grease. If so congratulations! You are in a relationship that some may find dysfunctional, but whatever - let them continue to pay rent, you have gutters to hang. 

But maybe your needs are a little bit different than that. Maybe you want a house or condo that will embrace and comfort you after a long day of work. One that is low-key and unassuming, that will never cheat on you with the plumber or the furnace repairman every three years. Maybe you want a house that says 'welcome, but not for too long' to your guests.

Think bigger...

House buying in the long term is all about putting a ring on it and for that, buying real estate is no different than dating. Except instead of considering real people feelings you are considering location, taxes, parking spots. Does this house come with a lot of baggage? Will it need constant attention and upkeep that you don't think you will have the time to deal with such drama? Is it mainly concerned with your future earnings? Is it the type of house that your parents warned you about? 

Your mortgage broker can be that friend that is your reality check at the bar when you've had too much to drink and are thinking that person with multiple piercings, tribal tattoos and the story about her convict boyfriend is worth getting to know a bit better.

Seriously? You want to declare your comic book collection as a asset?

Your mortgage broker might seem like a buzz kill when they tell you don't have the money to hang with the sorority cheerleader or the entire Philadelphia Flyer booster club.  A good mortgage broker has your back, who will ultimately help you find out financially if that 'dream home' is actually your dream home or just some fancy-dressed, low-morals house who wants to party, party, party and will never commit to a 25 year relationship, much less a five year one.

Next option please...

Realtors are your trusty drinking buddy when it comes to the real estate dating business. The good ones will take you out on prospective dates, maybe cruise the scene for you ahead of time, pre-selecting those homes that will give you a good time for at least a year or two. They want to get you 'in there' and say things like 'no problems' and 'you can totally hit that' and 'don't worry about it, I'll drive your car home'. Realtors are all about you hooking up with that great score that you want. Mortgage brokers are all about the vested interest you can logically commit to. Don't dance if you can't afford the shoes.

With that warning, let the courtship begin!

First you (and/or your partner) go on a double-date or ten with the Realtor, find a home you like and get the measurements. Things are looking good, you've seen the inside, you feel comfortable. Maybe you decide to get a little more serious, move it along to second base.

You and your realtor do your due diligence; try to find out if perhaps there is some type of theoretical STD in it's past. It's a good time to perhaps invest in a certified looker-upper (house inspector) that a friend referred give your potential partner the ol' once over. 

Ideal, but not available.

They nod back to you; everything looks okay from the outside. Bling is not too ostentatious, no sign of excessive body tattoos or hidden piercings. Time to introduce yourself to the seller with an offer.

You now are feeling pretty good about how things are going; you are committing yourself to this relationship. You are thinking something along the lines of what you are going to be telling your friends who thought you could never score with something like this. You might already be imagining where you are going to be putting the nursery or the media room. The sellers have accepted your offer and you've got your pack of condoms and a bouquet of roses ready.   

Now, all you have to do to get to Home Base is pay for the date all up front.  And pay big time, for most people we are talking decades. You have to get a mortgage (literally a 'death pledge', thanks schooling), to claim that house as yours. 

Your financial institution may believe that your relationship is doomed from the start or may give you a higher interest rate than average but you won't know that because you believe that they have your best interests at heart. After all, banks aren't in it for the money, right?

But sometimes, they may just know something you don't.

Maybe another financial institution may believe in you more, maybe they will give you a rate that saves you thousands in the long term but doesn't look like much in the present. And that is what a mortgage broker does; finds the best mortgage for you out there, given your needs, wants and credit score. 

It can suck being a mortgage broker, being the bearer of bad news if the relationship between income and mortgage doesn't fit. Maybe they will have to tell you that you were courting a corvette when you drive a hyundai. Your idea of going out is bowling and Carl's Jr (disclaimer - I love bowling and Carl's Jr.) while that house's idea is Jack Daniels and Motley Crue (disclaimer -I also love Jack Daniels and Motley Crue).

An honest mortgage broker may have to point you back to the dating pool to find that true love that you may have overlooked the first time, so overwhelmed were you by the crystal chandeliers and heated bathroom floors. But usually when all is said and done, when it's the right person in the right house with the right amount of income being spent on maintaining that relationship, it can be a beautiful thing. 

If it works, it works.

Balloons make everything better

If you are in the market for some Canadian real estate or just enjoy the read, please be free to submit comments or questions below. I might be able to answer your question or find someone who will. All referrals welcome!