I find it intriguing and somewhat alarming at the lack of knowledge surrounding the mortgage broking sector- especially in relation to Generation Y and nowadays what is deemed as Generation Z. Post psychology studies at University, I practically stumbled across the industry a few years ago through an interest in property and was relatively oblivious as to what exactly constitutes a mortgage broker and more importantly; the services they provide. Nonetheless, I am glad and almost relieved as I now clearly understand the importance of the industry and have decided to promote and offer an insight as to why I believe mortgage broking is changing for the better.
The Mortage Brokers Industry:
Mortgage brokers in Australia generally act on behalf of lenders, predominantly assisting people seeking and applying for both residential, commercial and investment real estate mortgage finance & also refinancing existing mortgages. Generally speaking, mortgage brokers do not charge customers a fee for their service. Brokers receive an origination and trailing commission per application from individual lenders.
Trends & Analysis within the Industry:
Undoubtedly; obtaining mortgage finance is one of the biggest financial decisions one will make in their lifetime. The initial process can be somewhat daunting and can make individuals feel as though they are on the verge of shouldering a life changing burden. For this reason, there is an increasing number of individuals seeking the services of an industry expert to put their minds at ease. With hundreds of products available through numerous lenders, mortgage brokers assist the client to choose a suitable product for their individual needs and requirements.
In industry terms, mortgage broking is still relatively new within Australia, with the industry starting to gain momentum during the early 90’s . Since then, it’s position in the market place has been on a steady incline. Industry representatives have highlighted that the mortgage brokers industry has essentially filled a void in the market by offering a convenient, extensive product knowledge from a range of lenders and an unbiased approach to lending. In years gone by, a typical individual/couple would seek the services of the bank they currently use for personal banking, however, statistics now show that the services of mortgage brokers are dramatically increasing.
A recent article published by the Mortgage & Finance Association of Australia (MFAA) revealed it has seen mortgage brokers share of home loans provided in Australia double over the last 10 years to reach a milestone 50 per cent during the March quarter.
Such results would support the view that brokers have a higher rate of converting loan applications as expressed by MFAA CEO Phil Naylor and thus people are now flocking to the broker channel have their financial situation assessed and receive advice on mortgage finances.
The figures clearly highlight that the industry is on an upward spiral and that the broking sector is continuing to lift its market share. With great home loan rates on offer, it is not surprising Adelaide mortgage brokers are experiencing best results in years.
With Industry standards constantly being reviewed and updated to protect the consumer; individuals seeking a personalised finance experience & evidence to suggest the broker channel is becoming a more preferable avenue of obtaining mortgage finance; it would appear plausible to suggest the industries future seems bright and with lending likely to increase gradually in the coming years the share in the market place for mortgage brokers will bolster.
For more information on anything included in this blog or to seek assistance with your finance needs don’t hesitate to contact me.
0411 110 151