The broking industry one of permanent change, but brokers have proven themselves adept at getting ahead of the curve. With Australia’s property boom showing no signs of slowing down, there has never been a better time to work in this industry, if you’re willing to work at it.
Working in mortgage broking goes a lot further than just setting yourself up and getting going. It’s a technical job, with challenges that constantly need to be faced and goalposts that continually change. Adaptation is the name of the game. With that in mind, here are the 5 major challenges facing mortgage brokers in 2021.
Long turnaround times are the bane of mortgage brokers lives. In a property market as hot as it is now, the difference of a few days between submitting a loan application and getting that loan approved can be difference between buying a new home for a client and going back to square one.
With that in mind, knowing how to deal with loan turnaround times, and how to inform your clients about the worst case scenarios, is one of the most important parts of the job. As a middleman, it is your duty to get the best deal possible for your client, and often that means letting them know how slow things can go. Keeping their chins up, and managing their expectations while they wait for their loan are vital.
Mortgage brokers proved during the pandemic that they are better than most at adapting. In such an ever-changing industry, the agile broker can get a leap on the sometimes cumbersome big banks by being an early adopter: during COVID, that was proved by the speed at which brokers took up online activities and worked around the physical limitations of the lockdowns to get the best results for their clients.
Now, in a post-COVID-19 world in Australia, they are reaping the benefits. Market share has never been higher, and that comes at a time when property prices are also skyrocketing, which means that brokers have never been busier, never written more loans and never made so much money as right now. That comes through adaptation to the new world.
Paperwork has always been an issue for brokers: making sure that a client is across all their documentation ahead of time can be one of the hardest parts of the job, especially when fear of missing out is at a peak during the property boom.
For successful outcomes, however, brokers need to know that they have all their ducks in a row before they start applying. Sitting down with clients, presenting them with their options and educating them about the politics of the possible in this fevered environment are the only way that brokers can ensure that they manage expectations and keep their clients on side.
Clients are forever changing, too. As the world goes through such a massive change, that filters down to all levels of society. The news media is filled with stories about the property boom in Australia, which induces large feelings of Fear of Missing Out in the general public regarding their properties and their homes. While it might seem like the best possible time to sell a home, it is commensurately not a brilliant time to buy one, as prices are so high.
It is vital that brokers, who are bound by Best Interest Duty, inform their clients about the financial situation they are in and place that information in the context of the economy at large. Are they small business people, or sole traders? Are insurance companies likely to be of assistance should anything bad happen? What loan option is best for them? As their broker, it is your job to be on top of everything and to guide your client through what, for them, is probably the once in a decade event of selling and buying a house.
While we have entered the post-COVID-19 phase in Australia, the upheaval of 2020 is far from over. Many mortgage brokers will be speaking to clients with small businesses, which have taken a huge hit in the last year and are still very much in recovery mode, while others will deal with insurance businesses that are still counting the cost of the hit to the economy.
On the health care side, we are still seeing the pandemic play out. Long covid, and how that plays out in primary care over time, is one of the big challenges facing insurance brokers and others who deal with the risk assessment side of the industry. Again, this brings expectation management to the fore: let your clients know that, while the house price boom is ongoing, we are far from out of the woods yet. Inform them of the worst case scenario of their situation – at least until the rest of the world is back on its feet again.
