Property prices being what they are, the dream of owning a home is yet to become a reality for most middle-income Australians. It’s the biggest financial investment most people make, requiring a sizable loan. When people do enter the property market, it pays to have the right professional in their corner when they sign on the dotted line. Yes, we’re talking about a Mortgage Broker. As of September 2016, 53.6% of all home loan borrowers in Australia engaged a broker to help with the legalities and legwork when taking on a mortgage.
So who exactly is a mortgage broker? In a nutshell, a mortgage broker acts as a link between the borrower of the home loan (the client) and the lender (usually a bank). Mortgage brokers do not charge clients any fee for their services; instead, they receive a commission from the lender the client selects. According to the National Credit Act 2009, mortgage brokers are required under law to communicate to consumers how they are remunerated in a clear manner so that all dealings are transparent and legal.
What is Mortgage Broking Management?
A mortgage broker can be a very valuable resource if a customer doesn’t have an understanding of the property market or the time to do their research. A broker’s wealth of knowledge, experience and industry contacts means they often secure loans at better rates or ones that are more suited to a client’s financial situation. Some of a mortgage broker’s duties include:
- Determining a client’s borrowing needs and capacity
- Providing suitable credit advice
- Researching and comparing the pros and cons of each loan to get the most suitable loan aligned to the client’s financial needs
- Helping clients with the loan application
- Assisting with the settlement process.
But does it mean that a customer needs a mortgage broker only if they are a bit clueless about having a mortgage when buying a first home? Not necessarily. As a person’s financial situation changes over the years, you as a mortgage broker can help when it’s time to finance a client’s next home, if they want to buy an investment property or even refinance their existing home loan. So it’s important for a mortgage broker to develop a good working relationship with your clients so that they return to you again and again.
The Mortgage Brokers industry is relatively new in Australia, having come into being in the early 1990s. Not surprisingly, the younger generation (42.5% of millennials) tends to employ the services of a mortgage broker far more than their grand-parents (just over 25%) who tend to borrow directly from a bank.
According to a report by IBISWorld, there are approximately 17,720 qualified mortgage brokers in Australia, with the industry showing a healthy growth of 5.3% per annum. According to the Mortgage & Finance Association of Australia (MFAA), Australian mortgage brokers broke a new record in the June 2017 quarter, bringing in almost $50 billion worth of residential home loans.
The average yearly income a mortgage broker earns in Australia is AU $56,629. Of course, this is dependent on experience, location and skill. The demand for qualified, ethical mortgage brokers is growing since Australians want expert advice from a trusted source to make the right mortgage choice.
Skills Required to be a Mortgage Broker
Excellent customer service skills: You need to build a strong rapport with your clients and your lending agents, so it helps if you are a ‘people-person’, one who likes interacting with people and helping them out.
A head for numbers: You will be doing constant calculations and need to have a flair for numbers and finance. You need to keep pace with trends and developments in the industry.
An eye for detail: You cannot afford to miss any vital piece of information and must document and detail all necessary paperwork, etc. in a step-by-step, timely fashion.
A strong moral compass: You need to provide comprehensive, convenient and unbiased advice to clients. You cannot favour one lender above another just because it means more commission for you – that would be unethical.
Good negotiating skills: Your role is to constantly liaise between the loan company/bank and your client so that a favourable outcome is achieved by all.
A can-do attitude: The mortgage industry can be cut-throat at times, so persistence and hard work pays (literally!) in this field. You need to have the ability and willingness to go that extra mile, especially in the beginning when you are just starting out.
Qualifications Required to be a Mortgage Broker
So how do you qualify to become a mortgage broker? Most mortgage brokers become members of the MFAA, which is the peak body for mortgage brokers in Australia and requires members to abide by a Code of Practice.
You will be required to operate under an Australian Credit Licence, hold a Diploma or Certificate IV in Finance and Mortgage Broking and maintain at least 20 hours of Continuing Professional Development per year.
Ready to take on a career in Mortgage Broking Management?
At Upskilled, we offer a 12-month Diploma of Finance and Mortgage Broking Management (FNS50315) ( which is the industry standard qualification for becoming a Mortgage Broker. This diploma provides you with flexible payment options and is the best way to gain a formal qualification in mortgage broking and has no formal entry requirements.
You will learn to assess clients' loan applications, help clients through the lending process as well as how to use industry standard financial planning software. Once you have the necessary qualifications, you can apply for a range of jobs in the sector, including self-employment, contract work or as a franchise, in finance broking or mortgage broking. It may also lead to employment as a mortgage manager or mortgage lending within a bank, building society, or credit union.
If this sounds like the industry for you, get started on a mortgage broking career with Upskilled today!