Alex McFadyen

We're going to talk about facts that we know so far. Unfortunately, the COVID situation isn't going away anytime soon. We need to talk about the impact on mortgages, lending, and real estate. 

The first thing that came up here is there was an article that was released. It states that the big five banks in Canada will now be mandating vaccines for their employees, contractors, and anybody coming into the bank. We're not going to talk about whether it's right or wrong, but we're going to talk about what that really could mean to you. 

Deryk Williamson 

Working from home has become common. A lot of businesses have adapted to allow their employees or team members to work from home. I think many people have found comfort in that, and many people are loving working from home. Because things are opening back up, many of these companies are trying to get people back into the office. I know that as a whole is going to cause some disruption in employment in general. People are looking for jobs to work from home and don't have to drive to a branch every day.

Vaccines are a touchy subject. There's a lot of people that are for them. Canada's numbers are very high for vaccinations. There's a lot of people that don't want it suitable for their reasons. If you feel forced by your employer to get a vaccine that you are against for your reasons, I can't imagine most people are just going to fold and get the vaccine. A lot of people are probably going to quit, or they get terminated, causing unemployment. I mean, my first thought is a lot of people in the banking world, if you're in the mortgage sector, they're probably looking for other opportunities such as where can I work? Do I get into the mortgage brokerage industry to work for myself, work from home, or work from our flexible company? There will be a lot of turnover from the banks and every company out there that will mandate this.

Dean Lawton 

The banks are just the first ones to come out and say this publicly, and we're only talking about the big five banks as of right now that have come out and said this is what they're doing. You got to think of all these office administrative jobs and government jobs that have had a work-from-home mandate for the last 18 months. To that point alone, aside from the vaccination, people are so comfortable at home. They're more efficient. Many companies came out and said their efficiency with their employees is way up with them working from home. This working situation eliminates that travel time to work, that's key, as is the mental state of being able to drive to work, get to work, fire up your mind, and then get into the prime of your day. That alone, I think, will make such a significant impact on every sector, where people are looking for jobs that make less money to keep this lifestyle. The people that made actual huge financial decisions like upgrading their home, moving to other cities, building a home office, there's just so much there even before you touch on the vaccination side of things. When it comes to vaccines, hot button topic, and you're playing with fires. If you're a corporation trying to make those mandates, it can be challenging.

Alex McFadyen 

We've never seen so many people work from home. We've got a lot of people who are being told to come back to the office. Without getting into whether it's right or wrong because that's not the conversation today, it will impact the bank's employees. Many people, believe it or not, walk into a branch to apply for a mortgage. They walk into the bank to get transaction statements all the time for us. They walk into the bank to pay bills. What does this mean? Prolonged service and wait times because they will be losing employees.

Dean Lawton 

We're going to see an impact on timelines. More importantly, if we see some skilled positions, not only are timelines going to suffer but just the quality of the transaction in general. When we're thinking specifically with our business, the underwriters we work with at these banks are just incredible. They're the reason why these deals are so efficient. They're the reason why we get one-day approvals. If they start to lose this quality of people, we've seen it, we've worked with poor quality employees at these institutions, and we go from a one-day approval to a 10-day approval. We're asking for the same documents repeatedly and just narrowing down to how it will impact our business and get a mortgage. That's my biggest fear.

Deryk Williamson 

Think about unemployment and people changing jobs. If you have an excellent broker or banker working on your file, you're probably getting some good advice. If you're in the middle of a mortgage application and people from companies mandating vaccines are losing their jobs, what does that do to you? Can you still buy your house? We saw a ton of this when COVID first happened, and there's a ton of unemployment when everything shut down. We had countless clients that were mid-purchased. They removed subjects and are waiting on completion. We saw different banks take different approaches. Some of them turned a blind eye, and they didn't want to look into it. 

How long do you have to be at your new job?

Is it a contract position?

Is it commission?

Can we use the income? 

Alex McFadyen 

What happens if you are one of those people out there, real estate agents or clients, and you want to work with a banker? How could this impact you? For some of these guys that work for the banks, this situation could impact them internally. If you are working with a mortgage specialist at a bank, or you're going directly to the branch, there's no doubt there will be an impact on your service levels.

A client called me on a Friday night to tell me that they had a live offer purchase in place since Monday, and no one has even picked up their file. That's five business days before someone's even picked up their file. How much worse could that be if they're losing even 10% of their workforce? 

What could that look like for people going directly to the branch who don't have the opportunity to go to different branches as we do? My biggest concern beyond that is the mentality and the psychology of the people that are working there. How are they going to feel if they're getting all this extra weight dumped on their shoulders and seeing people sparse out and go to different locations? I can't imagine the psychology of the people in the branch doing the extra work will be very positive. We advocate working with a mortgage broker directly, but this could hurt you even more if you have traditionally gone to a bank.

Deryk Williamson 

Imagine the flip side to that where you're feeling forced to get the vaccine, and you'll go and get it when you have your reasons not to maintain your job. A lot of people probably can't afford to lose their job. It's putting people in a challenging position. It's a controversial topic.

Dean Lawton 

Banks usually lead in decisions like this. They're traditionally a leader where the government follows and could be something that's just the norm for every business.

Will it impact us immediately? Yes. 

Alex McFadyen 

We may not see a lot of change for about one month to two months from when this podcast episode airs. We've noticed that since the history of these big five banks, they have not been very adaptable. It takes them years to change things. The biggest thing for me and just hearing the news, if you didn't think the banks and the government were in cahoots before, think again.

Dean Lawton 

There's a correlation there. The government will follow this same mandate very quickly, in my opinion. 

Deryk Williamson 

You should think about the direct correlation of someone self-employed if you are not claiming your income because you have write-offs or create expenses. If you're not paying tax on your income, the banks won't use your income. It's directly tied together and shows there's a lot of correlation between the two.

Alex McFadyen 

Many self-employed people may not claim all of their net income and do not want to pay tax. They've got so many different expenses. That's part of running a business. The downside is that the banks and the government don't necessarily want to finance you or help you get a mortgage. If you are that person and don't pay as much tax, they don't provide you with a mortgage. But we've got options for that. So don't, don't despair. Let's, let's change gears a little bit here. Thrive Mortgage Co. is independently licensed. If one branch or one institution doesn't say yes, then there could be other options out there. We're independent and can have these detailed conversations. If you're a banker listening to this right now, you should be sending us a message and talking to us about what you could be doing.

As a person looking to buy real estate, what can you do? How can you be prepared for these types of things? We already know that bankers, public servants, and many major corporations are pulling out mandates. How should people react if they need to refinance or buy a home, and they're not going that route?

Dean Lawton 

For example, many bankers who work at RBC have their mortgage at Scotia Bank for whatever reason. They don't just get their mortgage at the bank they are working. Don't you think Scotia Bank would be like, we know you work for RBC? Are you vaccinated? Because if you're not, we know you're going to be losing your job in the next two months. If you're working for a company with a public mandate like this, I can't imagine that won't come up in the qualification process. If you work for a corporation with a public mandate, I can't believe it won't be the case. 

Deryk Williamson 

You're probably right. I hope we don't have to ask people if they're vaccinated when we make a mortgage application, but we could get there.

Alex McFadyen 

If they go down this road, We could have some of our non-bank lending partners take a different approach, which is great about working with us. If you're one of those people not going down the road of getting a vaccination and you need to refinance, there's a level of urgency. Reach out. You don't want to get caught in that idea or mindset. Your renewals come up quickly. If you got a mortgage coming up next summer, you should be calling us straight away. That's 100% is something you should be doing.

Deryk Williamson 

If you're transitioning to a new job, many people wonder, do I got to be at this job for two years? That is not the case for the most part. Suppose you're transitioning to a new full-time position that's guaranteed 40 hours a week or a guaranteed salary position; we can typically use the income right away. If there's a probationary period, sometimes we have to wait for that to be up. A lot of times, you can get the probationary period waived. If you Explain that you're in the midst of a mortgage application, we tell our clients to do this all the time, and it works. If you're going into a part-time, casual position with no guaranteed income, that will pose a big issue for you. We probably can't use that income for a full two years. So as long as it's a guaranteed full-time position, it's not too long to be able to use that income in a mortgage application.

Dean Lawton 

Use that as a leverage tactic if you're a skilled employee looking for a new job. When you're negotiating your contract, and you say, I do not want to be on probation for the specific reason that I need to get a mortgage, that's a leverage piece that you should do. If you're skilled and confident in your position or recruited, ask for that.

Alex McFadyen 

If you're out there looking for a new position for this vaccination situation, you must get a salaried position. It's guaranteed income, not like casual part-time hours.

Deryk Williamson 

We've helped many clients transition from job to job or a job to being self-employed. We crunch numbers. If you can make X amount of dollars at this next position, what does that look like for you? It's something that we help our clients with constantly. If you are thinking about a transition and amid a mortgage application, we can efficiently run those numbers and show you what it looked like on the other side.

Alex McFadyen 

We already know that the banks already have slow turnaround times, and it could be slower working with us makes a lot more sense. What about real estate opportunities that we could see? What kind of opportunities can we see? 

Dean Lawton

We've talked about the departure from the major cities, and now we're seeing many people going back. We see those markets pick up. I think there's just a short window here where you could still get an outstanding deal in like the downtown city core of Vancouver. 

Deryk Williamson 

I think the rental market will continue to stay strong. Unfortunately, many people with what's happened with real estate prices don't qualify and can't afford to get into the market. Many qualified people are renters because they're still saving their downpayment or in a job with salaries increasing over time. The rental market can be substantial if you're looking for an opportunity to use the equity in your existing home. We've seen the rental market pick up. In the first half of this pandemic, there weren't many investments because of uncertainty. We've seen a lot of people starting to pick up rentals again.

Alex McFadyen 

The cities are ripe for continuation, and one of the biggest reasons for that is gentrification continues to be a factor in most major cities. Immigration will come back strong in the next 12 to 24 months. It's going to come back very strong.

Look at the rental rates in these different cities. Perfect examples we've discussed would be areas like Langley or Chilliwack, where we've seen rental rates go up by 20-30% in a year and a half. There's not enough housing. If you haven't found a way or don't understand how to get started, that's what we do all day long. Start listening to some prior episodes or reach out to the team. 

Dean Lawton 

We're getting back into a very competitive market. It started to slow down, and now we're getting into multiple offers again. I've heard from many of our top agents that being prepared and financing is pre-approved, you're ready to go. You could put yourself in a position to have short subjects or even subject-free, not that we recommend that, but you could win in these competitive multiple offer situations. That would be an opportunity; just being prepared. 

Deryk Williamson 

People are seeing the repetition of what's happening in the weather and moving away from specific areas. It's driving people to these areas where we haven't had these issues. That could continue to grow population and grow housing demand.

Alex McFadyen 

I've had three people reach out to me and try to save deals that we quite simply don't have the time to keep in some circumstances, not because we can't do it but because there's not enough time. That could have been changed by being more prepared. Be prepared, have conversations with professionals, and if you're working with a real estate agent who's not introducing you to a team like ours, reach out to us directly to take care of you.

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