When I first got into the mortgage business eight years ago, my mentors talked a lot about funding ratios, the number of mortgages you close with a lender compared to the number of applications you send that same lender. “Don’t apply to more than one lender for a mortgage” they told me, “lenders keep track of the number applications you send them, and if you don't close enough of them, they will cut you off!”
That sounded scary so I was sparse with the number of applications I sent out. Recently I have become much bolder, sending out just as many applications I feel is necessary to get the job done. The other day I signed up a client for a mortgage—I had to apply to five different lenders to get them this mortgage!
The mortgage was for a self-employed couple who were not able to prove income. They had just 15% down and to make matters worse, the husband did not have his permanent Canadian status. The first two lenders I applied to declined for one reason or another. Though I felt strongly that the application would eventually be approved by an “A” lender, I sent it to a “B” lender next, so the borrowers could at least sleep at night knowing they had a mortgage they could live with in a worst case. The B lender approved the deal but at a higher rate. I continued to shop and eventually found the applicants a mortgage at 2.25%, which by today`s standards is a very good rate!
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