When the housing market is hot and people are buying property, your purchase portfolio can boom. However, when property sales slow, the space becomes much more competitive.
Homebuyer habits undeniably fuel the Canadian mortgage market. And, as a recent Fitch Ratings report pointed out, that mortgage market has been competitive for some time.
In times such as this, you may be considering focusing more on refinancing business.
The beauty of a refi portfolio is that when the economy slows, people tend to use home equity to clean up their finances, including paying off debt.
Refinancing deals also tend to close faster as there are not as many details to confirm. You are not validating a new property, nor in some cases working with as many partners — such as a real estate agent. Therefore, they can take less time and resources.
If purchase business is down, now may be the time to expand your refi portfolio. However, purchase business and refi business are completely different and as such you will want to adjust both your approach to marketing and underwriting accordingly.
When you are considering expanding your refi portfolio, due diligence is even more critical than ever.
Often homeowners forget important details, such as that their parent co-signed, or they took out a secured line of credit. They may also think that they owe less on their mortgage because they do not realize they need to include the interest portion. In some cases, too, they might be seeing other properties in their neighbourhood listed for high values (but not necessarily selling at that price) and think their home is worth more than it actually is.
Because of all this and more, due diligence is the key. Although refi deals are quicker, that also means there is less time to verify information, and a lot still has to be verified, including value, homeownership, registered encumbrances, and more.
Full property appraisals can be expensive. In a refi deal, it makes good sense to use tools that do more — such as provide an estimated property value, legal homeownership record, registered mortgages, and so on — all in one place. Then you can proceed with a full appraisal if necessary.
Most financial institutions look at AVMs for refi business anyways – so doing the same keeps you one step ahead and facing less surprises.
Brokerages who want to see a shift in portfolio are served well to offer their agents and brokers access to tools to achieve the above.
An AVM from Purview offers all of this information and more. Plus, the tools offered by Purview can be used both for refi and purchase business, so you can be agile in your underwriting.
With Purview’s property tools on your side, you will be empowered to adapt to homebuying trends in any mortgage market.
Start accessing your tools today. Contact Purview by calling 1-855-787-8439 or learn more at www.purview.ca.
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