We're filling gap in market, says broker
An Auckland mortgage adviser says working with clients in a tightening lending market can be challenging – and maintaining a detailed approach is the key to success.
David Green (pictured above), director of Auckland brokerage Advice HQ, said from an indicative perspective, recent CCCFA changes implemented in July have put more value on a mortgage advisers’ proposition.
“It is now really difficult for someone to walk into a bank and get approval as the lending landscape has changed and people are struggling to navigate that,” he said. “It is important to manage client expectations especially around timelines and requirements banks are asking for, as some might have a three to five day turnaround times, however that doesn’t include additional questions or requirements with regards to new lending.”
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Green said mortgage advisers were there to provide clients choice with lending options because someone going straight to a bank for a loan had limited options to choose from.
“This is where advisers come into play and offer solutions for clients,” he said. “It is about understanding what the client wants and needs and solving that problem for them. The landscape has changed so fast and it is hard to keep up with the credit crunch.”
Green said the ability for banks to service clients on a personal level has dwindled and no longer existed.
“This is where advisers can fill the void for clients and fill in this gap,” he said. “The broker share percentage is slowly moving towards that now. In Australia, brokers make up 70% of the market share and I see that increasing as lending becomes harder to obtain – people really need that service.”
Green said the lending world had changed.
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“Documentation requirements and endless questioning on really small matters is in, so managing client expectations about why banks are asking for proof of insurance even though we have told them the amount and it shows on bank statement can be hard at times,” he said.
“The most difficult conversation I am currently having is with a newbuild client with a 12-month approval that has taken longer than 12 months to complete. The same client is now having to reapply for the same lending. In the meantime, building costs have increased and it takes longer to build.
“As advisers we need to have difficult conversations with our clients who are building homes.”
Green said many banks displayed a conservative approach as interest rates rise.
“We are now seeing rates increase faster and sharper and it is getting to the point where banks are moving test rates as well,” he said. “My concern is if rates go too high (which is driven by inflation), how long will that last and will rate rises curve or flatten off. As advisers, we need to provide our clients with transparency about this and understand what is going on.”
