The power of a good referral

Chris Allard of Ottawa-based DLC Smart Debt tells CMP how he's relied on referral partners to grow his business and how recent government interventions have affected his clients

The power of a good referral
CMP: What made you first get into the mortgage broker industry?
Chris Allard: Like most mortgage professionals, I did not plan on being a mortgage broker. While I was in university, I met a friend of a friend who was talking about his boat, penthouse and big SUV. I quickly realized I wanted all of those things! So I asked him what he did, and Andrew – who is my colleague today – said, “I’m a mortgage broker.” In that fluke of an evening, I signed up to do the licensing and became a mortgage broker a few months later.

My father used to be a bank branch manager and worked at CMHC and Beneficial in private financing, so the mortgage industry was table talk when I was growing up. It was definitely something I knew of and understood, and that probably made entry into the business easier for me.

CMP: How would you describe your time in the industry?
CA: I love the industry. I love chatting with people, whether that’s borrowers or referral partners. A big part of my business has been built on the customer service side. That means giving people quick responses, answering the phone and responding to emails in a matter of minutes. It’s why so many Realtors and financial planners refer business to me – purely because I answer the phone, get answers quickly and get files approved.

CMP: You’ve achieved a lot in a relatively short time. To what do you attribute your success?
CA: I was 21 when I became a mortgage broker, and you can imagine that most people probably wouldn’t want to take advice from someone of that age. But the same person who brought me on, Andrew, was a mentor and taught me how to speak with referral partners. That was a key part of my success in the beginning. From there, I have built strong friendships and relationships in the industry, mainly because I enjoy my job so much.

CMP: How have you seen the Ottawa market shift in recent years?
CA: I have seen a shift this year with many more first-time homebuyers being able to put 20% down after being gifted funds from their parents. My assumption is that because insurance premiums have increased from 2.7% to 4%, parents have chosen to get more involved. A couple of years ago, a first time home-buyer could buy in central Ottawa, but we are starting to see that many don’t have large enough down payments to do that. They either need a bigger down payment or a co-applicant.

CMP: How have your clients reacted to the latest interest rate change?
CA: I’ve not seen many clients rush into buying in order to secure a preapproved rate. However, the phone did ring with a lot of questions on whether a fixed or variable mortgage is best right now. It’s good that clients are looking into their finances, and I think that is due to the fact that we share a lot of information and explain how they will be impacted from the rate perspective.

I would say the biggest difference we’ve seen in the last couple of years has been caused by the qualifying rate of 4.84%, not so much the rate increases.

CMP: What are your views on the recent tightening of mortgage approval rules?
CA: I understand that the government wants to mitigate some risk; however, I find that they have created a scenario in which people who earn a low to medium income can no longer buy.

That means we are creating a bigger spread between individuals who have money and those who don’t have as much, which is the exact opposite of what the government says the rules were supposed to do. A single person can no longer afford to buy a townhouse, so instead a wealthy investor buys it and rents it out to them. Lower- or medium-income people can’t get ahead based on these new rules.