Home Loan Experts
2018 MPA Young Guns
2018 was not a good year if you needed to maximise your borrowing power. Serviceability got even tighter, the number of exceptions being allowed in the prime market dropped, and many lenders left the 5% deposit space.
In addition, lenders have begun to intimately involve themselves in the living expense assessments and some of the recent news articles highlight how strict this has become.
We have been increasingly educating clients about the way their loans will be assessed because they want to understand it and they want to know what variables are available to them.
Property portfolio manager
2018 MPA Top 100 Brokers
2019 and 2018 MPA Young Guns
It will be the greatest time for mortgage brokers, but also the worst time.
The credit environment is definitely going to be tougher now than in 2018 despite some politicians advocating to loosen bank policies to boost the real estate market. The big four are hesitant to make the change first.
We will see more second tier lenders, some supported by the big four, as institutional/shadow investors become more active in the market. We will see more diversified policies, such as low docs, professional investors’ niche, and a big boom in commercial lease docs and private funding for developers.
Cowboy brokers will keep suffering, and smart brokers need to play harder to seek better solutions and provide ongoing service to existing clients. As winter comes, spring isn’t far away.
2018 MPA Young Guns finalist
In 2019, I foresee a few trends. From the broker’s point of view there will be significant improvement in technology use by brokers to compete with increased complexity. In addition, offshoring or outsourcing is a big-ticket item to assist with profitability.
We have scaled up to three overseas staff now to build capacity for our team, along with updating a suite of software to be used internally.
A great number of brokers have stepped out from banks post-royal commission, and part-time brokers have been exiting. As such, we are looking to bring on new brokers, most likely towards the end of this calendar year.
From the banks’ side, I think they have reached the pinnacle of credit tightening. Hopefully, the trend will start to show more sound judgement and decisions, especially since the RBA has been active in promoting lending more recently.