Why borrowers are turning to brokers
- Published: by MoneyQuest HQ
- |
- Category: Industry news
According to recent research, broker client satisfaction levels are high. It also seems as though the number of borrowers turning to brokers for home loan help is increasing.
A recent survey conducted by Pureprofile on behalf of MyState Bank, found that 91 per cent of participants would recommend the services of brokers to family and friends. 86 per cent “were either very satisfied or satisfied with the experience of securing a mortgage through their broker.”[1] 517 Australians participated in the September 2021 survey, each of whom had used a mortgage broker in the past three years.
According to the 12th Edition of MFAA’s Industry Intelligence Service Report, the March 2021 quarter saw brokers’ market share of all new residential home loan settlements grow to 57.5 per cent. The average value of loans settled per broker for the six months to 31 March 2021 was the highest value observed to date, exceeding $7 million.[2]
So it appears that the mortgage broking channel is becoming increasingly popular amongst consumers. But before we examine why this might be and delve into the benefits of engaging a broker to help with the home buying journey, let’s revisit what a mortgage broker actually does.
What does a mortgage broker do?
The role of a mortgage broker is to guide clients through the lending process, and to assist them with finding a home loan that suits their needs, goals and financial situation. Mortgage brokers crunch the numbers for their clients and assess their borrowing capacity, taking into account market trends, fluctuations and lifestyle factors. They then present their clients with a range of home loan options to consider. Once the client has decided on a suitable home loan, brokers then prepare the paperwork required for the loan application. They also lodge the application on the client’s behalf, and liaise with the lender throughout the process right up until settlement.
Why are people choosing the broker channel?
Some of the findings from MyState Bank’s research underscore the key benefits of securing a home loan through the broker channel. The top survey responses given as reasons for using a mortgage broker were as follows:
- “Securing a competitive interest rate”
- “Access to the best loan to suit my needs”
- “Help with navigating the loan approval process”
- “Fast loan approval process”[3]
90 per cent of survey participants also indicated that they believe mortgage brokers act in their best interests.[4]
These results suggest that clients value the level of choice that mortgage brokers can offer, as well as the education they provide around the home loan approval process. Brokers have access to a wide range of loan products from a variety of different lenders. They compare these for their clients and explain key elements such as loan features, fees, interest rates and expected turnaround times. It also seems as though borrowers take comfort in knowing that brokers are legally obligated to provide advice that is in their best interests.
This high level of broker client satisfaction points to the strength of the mortgage broking industry. So if you have been weighing up whether or not to make the move into broking, now might be the perfect time to join the fold.
[1] The Adviser Magazine, 18/11/21
[2] MFAA’s Industry Intelligence Service Report, 12th Edition
[3] The Adviser Magazine, 18/11/21
[4] The Adviser Magazine, 18/11/21
Disclaimer:
This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).
Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.
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