Clients struggle to show borrowing capacity, says broker
All of broker Kirsty McKinnon’s referrals come from existing clients or word-of-mouth referrals – so she knows how much business can be generated simply by asking friends and family to review their rates.
“It will be more fruitful than advertising. Get out in the community,” McKinnon said.
As the Dubbo-based principal of Flair Finance, McKinnon draws her clients from throughout the Central West.
“Business has been very busy,” said McKinnon, who was an excellence awardee (finalist) in the NAB Broker of the Year - Regional category at the 2023 Australian Mortgage Awards.
“A lot of clients are looking to refinance their loans to a better rate. I see a very vast range of clients and properties. Owner-occupied properties are still probably the most sought after. Car loans are still strong, and we are seeing an uplift in commercial property as well.”
Like many other brokers across the country, McKinnon lists her clients’ borrowing capacity as one of the key issues facing her industry.
“Being regionally based, the average income is lower, and some clients are struggling to show capacity,” McKinnon said.
However, the run of rate rises hadn’t slowed business, McKinnon said.
“We’ve been equally as busy but not a lot of it is paid work. We’ve been restructuring or repricing loans that aren’t going to go anywhere (even clients not on our books) because they are mortgage prisoners.
“Clients are refixing or just pricing to remain variable and we’ve been repricing our back book. We’re seeing a lot of clients, but a lot that don’t have the capacity to borrow. However, we are still lodging a good number of applications per month.”
Despite research revealing borrowers need six-figure savings for a 20% home deposit, McKinnon previously told Mortgage Professional Australia there were still plenty of ways for borrowers to take their first steps on the property ladder.
She said people who didn’t have a 20% deposit shouldn’t be discouraged as there were a few schemes available to help with deposit requirements including the first home buyers, single parents and shared equity schemes.
These help people get into the market with a smaller deposit and avoid the need to pay lenders mortgage insurance (LMI).
McKinnon said for those that do not qualify for the schemes, there was still the option to borrow a larger amount of the property value with LMI in place or consider having family as guarantors.
“When it comes to property prices Dubbo is proving resilient,” McKinnon said.
“We haven’t seen a reduction in prices here and sales are still consistent. I am not seeing as many people relocating here as there was during COVID, but out of town investors seem to still be strong.”
According to McKinnon, who has been a broker for 11 years, it takes a lot of hard work and commitment to be successful.
“I am trying to build my business to a point where I can step out occasionally but it’s not there yet. Long hours and personal sacrifices come with this job no matter how much you try to avoid it.”
McKinnon said being a broker provided plenty of rewards, derived from helping clients.
“[It’s rewarding] seeing them so excited to buy their first home or help them with consolidating debts and making their cashflow so much better. Helping people grow their investment portfolio, seeing people drive away in their new car – all of it is what makes this job worthwhile.”
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