Excalibur is celebrating its first anniversary of serving business-for-self and other creditworthy Canadian borrowers who fall just outside traditional Prime mortgage guidelines. This means many users of these feature-rich, First National alternative mortgages are about to receive renewal notices. In this installment of Excalibur Exchange, a regular series featuring Elena Robinson, Excalibur's Regional Sales Manager, we look at the renewal process with emphasis on borrowers who are ready to make the move to Prime products with assistance from their mortgage brokers.
Elena, let's start with an obvious question: are you ready to accept renewals?
Yes, in fact we've already successfully processed our earliest adopters, those borrowers whose mortgage brokers were quick off the mark to spot the cost and service advantages that Excalibur has to offer. Our objective at maturity is to make it as easy as possible for borrowers to renew with Excalibur or if possible, use Excalibur as the springboard to move on to a First National Prime mortgage.
So in essence, you are hoping for one of two outcomes?
That's right, borrowers renew with Excalibur at maturity or with the expert assistance of their broker, they submit updated income and credit data and use Excalibur as the gateway to a First National Prime mortgage. Our goal is that the majority of borrowers will stay with First National in one fashion or another.
How many Excalibur borrowers do you think will advance to a Prime mortgage?
Given the credit worthiness of Excalibur borrowers, particularly the business-for-self class, we may be surprised on the upside. In fact, three Excalibur borrowers in our first month of maturities qualified for and received a First National Prime mortgage which is great news for them.
There is an economic advantage for borrowers to move to a Prime mortgage. Is there an economic advantage for mortgage brokers if this happens?
Absolutely. If an Excalibur borrower qualifies for a First National Prime mortgage, we treat this as a completely new deal and compensate our broker partners in the same way that they would be paid on every new Prime submission that we fund. And for the record, we want mortgage brokers to be directly involved in this process. We believe brokers should mine their Excalibur client database for those borrowers whose personal financial situations have improved to the point that a Prime mortgage is within reach.
So your advice to brokers is?
It really pays to work your database to identify borrowers who are in this springboard category and to go through the steps necessary to submit a Prime application. It's a great way for you to provide an extra service and create more value from your existing book.
What steps does the broker have to take?
The broker collects an updated income verification and credit report from the borrower and submits the application through their delivery system. That's it; we take it from there. The documentation is identical to what's required for every other Prime application, so it's straightforward.
In thinking about alternative mortgage clients who are able to move up, what's the catalyst?
Sometimes they've secured a higher-paying job or found greater success with their business, allowing them to earn higher income. We also see borrowers who have improved their credit score sufficiently to qualify for a prime mortgage.
If an Excalibur borrower can qualify for a Prime mortgage, why should they stay with First National?
First, we offer a broad array of Prime product choices, including insured and conventional, from 6-month to 10-year terms, and with a variety of features that are industry standard. Second, as a Prime lender with three decades of experience, we ensure deals are done quickly and accurately and we hold ourselves accountable to meeting high standards for service and deal execution. This combination of good products, good service and good rates is why mortgage professionals recommend First National over other lenders. Third, and not to be missed, borrowers incur no legal fees, whereas if they moved to another Prime lender, chances are they will incur these costs. Fourth, in certain circumstances, it's possible that the borrower's property will qualify for our automated valuation model or AVM. AVM eliminates the need for a third-party appraisal when there is price stability in the local housing market. This saves time and cost.
What about those Excalibur borrowers whose financial circumstances won't allow them to qualify for a Prime product just yet?
We'd like them to renew with us. All they need to do is sign back the offer of renewal. We do not require them to provide an updated credit application and this means no action is necessary on the part of their mortgage broker.
Now that Excalibur has reached its first anniversary, has it met your expectations?
It's surpassed them. We're ecstatic with the level of demand we've experienced. I would say Excalibur has very quickly established itself as the alternative mortgage for discerning borrowers who want industry-leading repayment options, uncomplicated early payout and is available for home purchases and re-financings. Based on first year volumes and the encouragement we've received from our broker partners, we're confident that Excalibur is a product that is right for the times.
If a broker wants to discuss the renewal process for Excalibur, how can you be reached?
I'm always available at elena.robinson@firstnational.ca or by calling 416-320-3138.