$50 million in loan applications over 12 months
For Lendium’s mortgage broker Daniel Renella, the key to a successful business is ensuring your clients’ best interests are front-of-mind.
Renella said good word of mouth would also often result in a referral.
Based in Adelaide, Renella has been a broker for more than seven years, looking after clients from all over Australia.
“Our clients are mixed, predominately residential lending including home loans for first home buyers to high-net worth investors and business owners,” Renella said. “We do take care of commercial and asset finance as well, but they form a smaller percentage of our business.”
Renella (pictured above) said business was “excellent” at present.
Loan business booming
“The last 12 months were my best, submitting over $50 million in loan applications and settling over $30 million,” Renella said.
“The difference is not due to declined loans, but rather I am one of the few brokers who submits pre-approval applications for clients, and it can take time for people to secure homes.”
When it came to some of the key challenges facing the broker sector, Renella said borrowers, first home buyers in particular, having sufficient funds to purchase in their preferred area remained an issue.
“Generally, [borrowers are] earning an insufficient income to service the lending required due to high interest rates and tightened lending guidelines,” Renella said.
Rate rise has not affected business
Despite tough times for some borrowers, Renella said his business hadn’t been impacted by the run of rate rises, the last of which occurred in November last year, however, he’d managed his clients’ expectations about what they could purchase.
Renella admits his success hasn’t come without plenty of hard work.
“In my opinion, it is necessary to work long hours and make personal sacrifices to be successful, however, everyone's view of success is different,” Renella said.
“I love making a difference to my clients. I never focus on the numbers, just the task of getting things done for my clients and helping them achieve their goals and dreams.”
Broking sector in 2024
Renella said it was hard to predict what 2024 would bring for his sector.
“Many economists were predicting additional rate increases, however, that’s probably unlikely now that inflation appears to be reducing more than predicted,” Renella said.
“We wouldn't want interest rates to drop drastically as that might reverse the pain we've been going through with higher rates to correct inflation.
“Personally, I believe interest rates are a little too high in the mid 6% and should settle with an average of mid 4%, based on home prices and household incomes in 2024.”
Renella said the widely-publicised mortgage cliff had been a shock to many, although largely people had adapted to the new environment. However, if rates started to decrease too rapidly “we could see a significant increase in house prices”.
“While I make a point to discuss the repayments with my clients, most are primarily focused on the maximum amount they can borrow and therefore maximum purchase price – it’s a natural drive I see in people which hasn't changed over the 14 years I've been in the banking sector,” Renella said.
“I personally believe rates may start to trend downwards in the second half of the year, if inflation trends closer to the target range.”
South Australian mortgage sector
More mortgage brokers are entering the South Australian market, although the number of loans they settled was down when compared to the same time a year ago according to the latest research from the MFAA.
According to the MFAA Industry Intelligence Service 16th Edition Report, which covers the six-month period from October 1, 2022, to March 31, 2023, South Australian brokers settled $9.46 billion in home loans compared to $9.52 billion during the equivalent 2021-22 period, down 0.6%.
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