Top Broker's Joshua Vecchio explains how to prepare yourself to make the most of the raft of changes in the lending market.
Director of Discovery Finance Group, Joshua Vecchio has written over $250m, using techniques and tips being shared on his website Top Broker.
Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.
Bob Dylan, 1963.
With all of the changes helped along by APRA to investment lending, serviceability rules, LVRs and interest rates the lending market seems to be in pandemonium, but from this flux comes a terrific opportunity for brokers provided you’re ready for it.
Having spoken to a few brokers and BDMs it seems that quite a few people are struggling to come to grips with the recent changes in the market, so I thought I’d put together 6 ways to keep up and conquer change.
1. Recognise that change is the only consistent in our industry – and the world!
JFK once said that change is the law of life and those who look only to the past or present are sure to miss the future. So are you going to spend time dwelling in the past on the policies of yesterday, or punch through and find solutions for today? Practically this might mean you need to look at diversifying lenders, speaking with other brokers to see who they are using and having success but you need to accept the changes and move forward.
2. Understand what you can and can’t control.
If you read the papers there seems to have been a new article each day on property or lending getting more negative by the day – which then filters through to the clients we deal with – but we all need to remember we can only control our own businesses, and not that of the banks and wider economy.
As an individual broker there isn’t much you can do to influence the economy or APRA’s investment lending thresholds but there is lots you can do to help your customers continue to move forward and provide excellent solutions. Maybe it’s time to ditch that subscription to the SMH for a good book – I love the 7 Habits of Highly Effective people, check it out if you haven’t read it already.
3. Stay ahead of the change, one day at a time.
At the moment I’m spending a 15 minutes each morning reviewing all of the BDM emails and policy updates, and what this translates to is knowing what bank is lending to which types of people rather than being reactive once I have a deal in front of me. Remember constant practice and incremental improvements are much easier than trying to do everything all in one go!
There are also resources to help make this easier like the MPA Lender Update that is published whenever new changes go out, this can help cut down the time you spend reviewing policies and long documents.
#pb#
4. Flexibility & a positive attitude
Being positive is not necessarily the same as being happy about the change, but change will happen whether you like it or not. If you’re negative about it you’ll feed that feeling to your staff and customers and make the change more difficult for everyone. Being positive is about seeing how these changes can benefit you and your customers – see the next point.
5. See the big picture
Change isn’t always a bad thing; at least not for everyone. Having to use a different bank, an alternate structure or reduced gearing for a customer might mean more work right now, but could help them in the future if rates increase exponentially. You need to realize that a change isn’t the end of the world, but just the beginning of a new era.
Ultimately I think these changes mean more opportunity for brokers because customers that might have been completely wedded with one bank may need to look elsewhere for other options to achieve their goals – which means opportunity for brokers to add our true value.
6. So how do I deal with all of the APRA changes?
Simple – Accept it, evolve and adapt.
Like Bob Dylan said – you better start swimmin’, or you’ll sink like a stone. There is no benefit in dwelling on past policies or being negative and complaining, you need to continue to move forward, understand what you can control, stay on top of the change and ultimate see the bigger picture and that this will lead to more opportunity for brokers – to showcase how much we can help our customers, and the importance of having multiple lending options rather than being locked into one single bank.
This article originally appeared on Top Broker, a growing online space where tips and strategies are shared by Australia's top mortgage brokers.
