Two different experiences led Jesse Abrams to believe the process of getting a mortgage could be greatly improved.
First, while working in digital marketing, one of his former clients was a large Canadian bank. “I learned how out of touch they are with home buyers, especially first-time buyers,” the 32-year-old Abrams says. “Their products are not always the best available, the process isn’t easy and you have to go in person and during bank hours and deal with a representative biased to their institution. That jaded me to banks for a mortgage.”
Then he went looking for a mortgage for himself. “I knew I wasn’t going to go to a bank, so I looked online and all I found were these rate aggregation sites and they just confused me. There were too many options,” he says. “They expected me to understand if I was high ratio or…if I wanted a fixed or variable mortgage.”
Then he had an hour-and-a-half-long conversation with a broker who sent him a four-page document to fill out with “a ton of back and forth.” Finally, he learned who his mortgage was with, but he never learned why. “The lack of transparency really irked me,” says Abrams. “I realized, wow, there’s a big opportunity here.”
That’s how the idea for Homewise was born. The online mortgage platform, launched in July 2018 from the basement of Abrams’ Toronto home, set out to provide “the best mortgage experience for every home buyer in Canada.” The company, which now has a team of 14, including 10 mortgage brokers and agents, has just expanded into Manitoba, Alberta and British Columbia. The goal, says Abrams, is for Homewise to be available across most of Canada by the end of the first quarter and in Quebec by the end of the year.
The service is free to use (the company is paid by lenders) and home buyers can apply online anytime. Within 24 to 48 hours of filling out an application – which takes about five minutes – Homewise says consumers will be offered the best three mortgage options from more than 30 banks and other lenders, including credit unions, monoline lenders and private lenders. The company aids those seeking a mortgage pre-approval, approval, switch or refinance, along with a personal advisor to guide them along the way.
Abrams says the process is more convenient, simpler and quicker than a bank and will save people time and money – they aim to save consumers up to $20,000 on the average mortgage.
The company recently introduced a Realtor referral program. “Lots of Realtors and financial advisors who we work with want more technological advantages to speed things up and give better service,” says Abrams.
“We say, ‘Here’s an online site.’ This is a good way to have your own unique URL, you’ll be kept up to date and give them (the client) a share of the commission.”
To be part of the program, a Realtor signs up (Thinkhomewise.com) and receives a unique referral link. Then they tell their clients about Homewise and share their link. When the client’s mortgage closes, the Realtor receives a bonus of up to $1,000 and their client receives $100. (Realtors earn $1,000 for referring a mortgage more than $650,000; $750 for a $401,000 -650,000 mortgage; and $500 for a $150,000 – 400,000 mortgage). “We have a few hundred (sales representatives) and five brokerages signed up so far,” says Abrams.
Soon the company expects to make further technological advancements. One will inform home buyers of their best mortgage options even quicker than within the 24 to 48 hours promised now.
For home buyers who want to educate themselves, Homewise also provides a wealth of information on topics such as the difference between open versus closed mortgages; fixed versus variable; and why rate alone is not the most important consideration. And you can learn about the various closing costs, the land transfer tax and rebates and the First-Time Home Buyer Incentive, which was introduced in September 2019.
“It’s going really well,” says Abrams of the progress his company has made to date. “We’ve had thousands apply. Our online application has been used by Canadians for mortgages totaling more than a billion dollars.”