- Ricardo Makyn/Staff Photographer
Managing Director of First Mortgage Brokers, Karla Henry.

Ashford W. Meikle, Business Reporter

The competitive mortgage industry has created a niche for brokers as companies explore ways to reduce their front office operations even though the concept is new in Jamaica, says general manager of First Mortgage Brokers, Karla Henry.

"Most people go directly to the lender. The concept is fairly new in Jamaica because we have never really had anybody facilitating the client and shopping around for the loan," said Henry in a Sunday Business interview.

She says her company, which was launched this July, has made a timely entrance in the real estate sector, saying there were moves now to outsource certain mortgage functions.

"Like anything else, the industry is changing and becoming very competitive and mortgage companies and real estate agents are now looking at how they can outsource their front-line operations similar to insurance brokers," said Henry.

Unaware of product offerings

"Moreover, very often, clients are not aware of the many product offerings which are being offered by the various mortgage companies."

Typically, the process works like this: At the first point of contact, when the mortgagor approaches the mortgage broker, the broker interviews the client, assists in completing application forms, and collects supporting documents, which are then forwarded to the lender for processing.

The mortgage broker also maintains direct contact with the mortgagor up to the disbursement of the loan.

But a big aspect of that process involves the mortgage broker shopping around for the best mortgage rates for individual clients.

"People think the mortgage process is complex and so they feel intimidated, but it does not have to be," remarked Henry. "What we are trying to do is give them the information and move the process as fast as possible so that we can save them time and money."

FMB, for example, works with a pool of professionals - such as valuators and real estate agents - who reduce their professional costs for clients who are referred to them by the mortgage broker.

The company has a working relationship with FirstCaribbean International Building Society and Jamaica National Building Society and is actively seeking to partner with the other private mortgage lenders.

Lenders' biggest mistake

According to Henry, the biggest mistake that lenders make is that they do not pre-qualify clients, a service which is offered free by First Mortgage Brokers.

"Most persons look at properties or enlist a real estate agent without knowing how much they can afford and then get disappointed when they are turned down by the mortgage company. The first thing to do is to get pre-qualified - knowing how much you can afford to borrow - and not put yourself in a position in which you can't sleep at nights," she said.

"When we package a loan, our major goal is to get the loan approved since we underwrite it as well. We don't send an application that we think is not going to be approved."

As far as fees are concerned, Henry says it varies with the size of the mortgage, but it can be up to one per cent of the mortgage loan.

ashford.meikle@gleanerjm.com.