In my time as the Hudson Finance Manager over the last 11 ½ years, I have presided over a lot of change in the industry and none more so than the last 2-3 years where the changes have been unprecedented.
The changes have not been limited to:
- Major credit policy changes around serviceability, living expense calculations, acceptance of certain security properties and products on offer
- Numerous rate changes applicable at various levels to home loans , investment loans, interest only and P&I loans
- Policy changes around Guarantors and who and what is acceptable
- Changes around being able to roll over interest only terms without credit assessment
- Phasing out of the once popular line of credit products
- Crack down on older applicants with a large emphasis placed on their “exit strategy” going into retirement
There are plenty of others aswell that all in all have simply just made it more difficult to borrow money. The credit cycle is certainly in tightening mode and the WD40 isn’t looking like coming out any time soon to loosen up and allow, particularly investors, to get back in the race.
A lot more of my time as a consequence has been spent talking with members about strategies for them to improve their overall lending positions or to put in place a strategy that is going to be able to get them in a position to borrow money for their desired purpose as soon as possible.
This may be switching investment loans to principal & interest repayments to save on interest and pay down debt or reducing credit card limits or perhaps even selling an underperforming property to enable them to get into the market in a more desirable location. This is done in conjunction with their financial adviser as part of their overall financial goals and objectives.
It has given me a chance to reflect on what services we provide our members here in the finance department outside of simply finding a suitable loan product for your needs.
- Conducting finance reviews to see if we can reduce your interest rates with your current lender and then compare against the cheaper offerings in the market to see if it is worthwhile changing lenders
- Arrange valuations for members to get certainty around equity level to enable you to plan investment strategies
- Assist with the sale of properties by preparing discharge authorities, put in place partial discharge or substitution of security requests to ensure your lending structure looks as it should post settlement
- Assist in negotiating lower than advertised fixed rates and assist in the switch process
- Arrange applications for renewal of interest only terms with existing lenders
- Provide feedback on borrowing capacities as they stand currently and provide advice on how you can improve your borrowing capacity in order to meet your financial goals
- Assist with advice on how to go about speaking with your lender about hardship provisions
- Arranging interest in advance switches
- Assist in disputes with lenders around refunding fees, interest etc
- Provide industry updates and tips through news letters such as this, rate updates and more
Ultimately we are not just here to set up your loan but we are here to assist you with a multitude of different aspects to your lending and banking in general. We have been here for a long time and we don’t switch around “relationship managers” like the big banks do so you get quality and consistency of service. A huge part of this is the ability for us to work in conjunction with your financial adviser to ensure your broad financial needs are met.
If you need assistance with any aspect of your banking please don’t hesitate to give myself or Bree a call.
Deloitte Access Economics have put together a great (but very long) report on the value of mortgage broking. If you want to have a look through, please see the link at the bottom of the article but a brief summary of the findings are below.
- Mortgage brokers strengthen the entire Australian mortgage lending industry by fostering competition and therefore supporting all Australian home buyers and investors.
- The mortgage broker channel has contributed to a fall in lenders’ net interest margins of more than three percentage points over the past 30 years.
- More than 90 per cent of customers are happy with their mortgage broker’s performance.
- Mortgage brokers arrange more than half of all home loans each year, and this number continues to grow.
- Mortgage brokers, on average, have 13.8 years of industry experience.
- Mortgage brokers drive competition by improving access to lenders that are not major banks or their affiliates. The share for these lenders increased from 21.4 per cent in 2013 to 27.9 per cent in just four years.
- The average mortgage broker has access to 34 lenders and uses an average of 10 lenders on their panel, bringing more choice to Australian home buyers.
- Three in ten mortgages arranged by mortgage brokers are for customers in rural or regional areas, improving access to home lending for rural and regional Australians.
- The mortgage broking industry contributes $2.9 billion to the Australian economy each year, supporting more than 27,100 (full-time equivalent) jobs.
- Brokers that are sole traders earn an average income after costs and before tax of $86,417.Brokers depend on strong relationships – more than 70 per cent of mortgage brokers’ business is referred from existing customers.