Evaluating Your Portfolio in an Uncertain Market – An eBook for Lenders of All Sizes
Generate Predictable Revenue through Increasing Refi Business
If you want to generate predictable revenue, you first have to understand what predictable revenue is.
HubSpot has an excellent definition: “Fundamentally, Predictable Revenue is a framework to create consistency year-over-year and provide business growth based on a formulaic process – not last-minute hustling and guessing. That way, you’re “predicting” how much “revenue” your business is constantly generating.”
Mortgage agents and brokers are in a unique position to create predictable revenue. Every deal you put together is a future opportunity so being on top of your existing client base is an excellent way to work towards predicable revenue – and we are not talking birthday reminders.
There are some specific dates you should stay on top of with regard to your existing client base: first mortgage renewal dates (obvious), but really every client should be timed up for an annual review.
Why? Because the Canadian real estate market continues to be hot, hot, hot and a lot can change in one year.
When performing your annual review, there are 2 key criteria you should be looking to assess: 1 – property value, and 2 – registered mortgages. When assessing property value, an AVM is a great way to see if the property has increased in value. Next, looking at registered mortgages helps you determine if anything has changed since the last deal you put together.
Once you have determined that enough equity exists to propose a deal, your next step is to look for reasons why your client may benefit from refinancing. Looking at their last credit report is an excellent way to see if they had credit cards and loans at the time you did the last deal – which may or may not have been consolidated. Even if debt has been consolidated, they may have gone in to use the credit again.
Also, take a look at existing second mortgages and who loaned the money. If it is a private mortgage likely it is renewing every year – not to mention that it is likely interest only and renewing with big fees. This is a great motivator for a client to refinance to an institutional lender. Likewise, the client may have a line of credit. You know as well as we do that lines of credit are accompanied by monthly compound interest and are, in many ways, just a giant credit card. This can be another excellent reason for a client to consolidate and move to a fixed term mortgage that will see them debt free in a predetermined time frame.
By looking back at all of the mortgages you have funded, and timing them for regular follow-ups, you can begin to use refinance business to generate predictable revenue that can see you thrive, even at times when new business may not be at its peak.
Want to get started with an AVM and checking existing equity?
Want to get started with an AVM and checking existing equity? Visit Purview today at http://purview.ca/.
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