Being a loan processing service provider, we see multiple successful mortgage brokers and financial businesses in action every day. One up and coming broker asked me this question recently: “What are the good brokers doing differently?”. This would perhaps make a good reading for anyone considering a career in mortgage brokering or looking for some hints on improving their business performance.
1) Chose aggregator well
There are wide-ranging aggregator options in Australia differentiating their offer on pricing models, CRM software, support structures and some specialty lending products. A good broker should pick the aggregator based on the financial conditions and the quality of support they require.
2) Establish strong internal systems
Where our successful clients make significant difference is their internal management systems. For example, brokers with systematic approach to sales and operations tend to turn over a large number of very satisfied clients. Some of our clients value paperless office and process excellence tools. This significant improves productivity and results in higher financial and intrinsic rewards. Properly prepared loan applications with well-presented scenarios and complete documentation will be always processed fast by the lender. Good communication channels with the applicant will also ensure that any additional documents required by the lender are obtained quickly, reducing settlement times.
3) Pick your clients
Sometimes, the biggest skill might be to say no to a deal. Most often, loan deals fail due to the poor scenario. A typical deal might take over 10 hours of work. Loan applications that are based on weak financial assumptions or have a marginal serviceability will struggle to be approved by the lenders. This typically means a lot of time dedicated to a deal that fails, resulting in both broker and applicant dissatisfaction. Similarly, borrowers that are ‘shopping around’ or have not disclosed their bad credit history will result in a lot of work without any benefit to the broker.
4) Charge a fee for high risk clients
We recommend that a website lead, client with difficult scenario or client who is a ‘risk of flight’ (i.e. shopping around several brokers at the same time) is charged a professional fee. It is quite possible that such client will not even go ahead with the loan if they are aware of the fee requirements. However a refundable fee should ensure they stay with the broker until the settlement and will at least ensure payment for the professional service provided if the loan does not go ahead.
5) Build good relationships with lenders
With a choice of lenders available, there is a product in the market for anyone’s needs. However, we see that our most successful clients, establish strong relationships with 4-5 lenders, know their products well and use these to constantly deliver value to the loan applicants. Often, the product with the best rate will require long approval time and might result in no approval at all. By having a good choice of familiar lenders, brokers can turn over deals quickly and provide their clients with some amazing volume related discounts.
6) Ensure NCCP compliance
Maintaining the paperwork is time consuming, however brokers that look after their NCCP obligations are always going to pass the compliance audits. This ensures business continuity and provides great service to the borrowers since it ensures they get the product that suits their needs. Brokers should always be on top of the lender and statutory requirements, as these can change regularly.
7) Focus on post-sale service
Most of the brokers can make a sale. Our most successful clients also have great service during the loan approval process and after the settlement. For example, making the applicant clear about the complexity of the approval process and keeping them constantly in the loop with lender updates makes loan application process less painful. Adding to that some sort of appreciation gift after settlement, often results in a great testimonial and future repeat and referral business.
8) Outsource Loan Processing
Broker’s time is best used to build their business. Loan processing can be left to the operational experts that will ensure applications are submitted to the lender, followed up to settlement and NCCP compliance documents are complete, every time. Good loan processing providers will ensure that broker gets a ‘second pair of eyes’ without a cost to employing, training and supervising staff.