“I’ve just transitioned my mortgage broking practise from being part of a franchise for the last 6 years to now setting up as an independent with my own ACL. This transition has involved creating a new business name and branding which has prompted me to setup a new marketing strategy in the digital space.
Biggest challenge generating leads under a franchise is the restrictions when it came to direct marketing and unfortunately this included advertising online.
I should be 5 years into my digital plans instead i feel like i’m about to start my first day at school when I launch the digital campaign this month.
Bread and butter leads have been existing customers requiring new finance or the existing loan is ready to refi. You close 100% of these transaction types and you’ll rarely lose it to a competitor.
The way to destroy these repeat business leads is by not having systems in place to maintain contact. One would assume these customer management systems would be in place under a franchise model. Think again!
Referral business was all i could rely on under the franchise agreement and establishing partnerships with businesses such as real estate agencies gave my business the leads it needed to get some momentum. You only need one or two good businesses that refer constantly. A very high percentage of these leads close.
I can’t give you any feedback on digital leads yet other than they will be much tougher working through the volume to get to a quality lead.
That’s my brief story. Hope it helps. I could add that when your finalising your answers that somewhere you mention that joining a franchise in the broker world is the worst decision someone could make if that person is under the impression that the franchise will help with there marketing and lead generation. It’s all smoke and mirrors and they should just walk away.
“Not having leads. I don’t have a problem closing leads as such. When I begin dealings with a client my first step is to assess the client to determine what can be done for the client. I then share the findings of the assessment with the client and inform them of their exact situation and how they are placed in the market and what can be done for them. I also inform them what can be done to improve their situation. Then we will see what is the best way to enter into a mortgage and how things can be improved on an on going basis.
A good service to the client is not just obtaining a mortgage product for the client but to keep working with the client in continuously improving their position. The best rate is not necessarily the best product as opposed to taking what the client may qualifies for and being proactive in paying down the mortgage as fast as they can. The savings to the clients is greater in paying down the mortgage at a faster rate as oppose to the applicable interest rate. In among it all the question of closing leads is depended on a brokers ability to understand the client, the clients ability and circumstances and utilizing that data to appropriately matching the right product for the client and providing the client with a method of addressing the mortgage to expressly pay down the mortgage. Sure every client’s expectations of being able to obtain the best mortgage product is what makes clients go shopping. However, informing the client of exactly how they stack up in an application is the best way to allow reality to prevail. ”
a lack of deposit, but when you look at all the alternatives, it ends up being a lack of determination and self discipline of the client to have a budget, spend on needs and save on ‘wants’. The clients that show an ellement of financial discipline will work towards there deposit once shown other methods to speed the process up. So the leads that have a genuine determination to get a home tend to ‘close’, but the others continue along their same behaviours. There is a mentality with some that it’s the ‘right’ to have a home loan and can’t understand why they can’t get one without savings, but with new cars, TV’s, holidays, cafe’s, going out etc | a lack of deposit, but when you look at all the alternatives, it ends up being a lack of determination and self discipline of the client to have a budget, spend on needs and save on ‘wants’. The clients that show an ellement of financial discipline will work towards there deposit once shown other methods to speed the process up. So the leads that have a genuine determination to get a home tend to ‘close’, but the others continue along their same behaviours. There is a mentality with some that it’s the ‘right’ to have a home loan and can’t understand why they can’t get one without savings, but with new cars, TV’s, holidays, cafe’s, going out etc
“Probably more on getting leads rather than closing them: Lack of consumer education about mortgage brokers. Educated clients (my preferred target market) think they can ‘do it themselves’. There is still some ‘bad reputation’ out there from the industry where potential clients think they pay more to go through a broker.
On closing leads: Similar to the above, potential clients often think it is ‘too good to be true’, or there must be a catch. They don’t realise it is a genuine opportunity to save money.
Other than that – paperwork. Combined with the above, they don’t think the time is worth the effort.”
My biggest challenge is actually finding the opportunities to begin with. I have a long history working in the finance industry, but have only been working as a broker for just over 12 months. The previous 3.5years was spent in Hervey Bay (where I’m still working as a Broker), but as an employee for one of the big banks, as a Business Banking Manager, looking after a small number of large business customers. My focus now is on Home Buyers and Small Business, so I have to start from scratch with building a client base.
“I am in my 43rd year of doing this. My biggest problem is my customers listening to bad advice from brokers who are new to the business and make outrages promisses that they can’t deliver on but promote themselves so well that the customers don’t realise until it is too late.
We need more professionalism in the industry. If you can achieve this, good on you. | I am in my 43rd year of doing this. My biggest problem is my customers listening to bad advice from brokers who are new to the business and make outrages promisses that they can’t deliver on but promote themselves so well that the customers don’t realise until it is too late.
We need more professionalism in the industry. If you can achieve this, good on you.”
The general public have no idea how complex finance applications are and how the decisions they make on a daily basis will impact on an application down the track. ASIC say we need to teach this stuff in schools and that industry stakeholders should be involved in teaching the general public. The biggest problem I have is being able to reach people who are prepared to take the time to listen and learn from my experience. In general people don’t want to “bother” a broker until it’s time to buy which is usually too late to correct changes. Ideal time is at least 6 months before they are ready to put in an application. The decisions they make after the loan is approved will also determine if their investment in the property is at risk or not. Again I get calls generally too late to be of much assistance. In summary the overriding problem is that general public don’t know the stuff they really do need to know and wont take time to learn.
“I provide a face to face service for rural and remote business and agri clients.
My greatest challenge is providing that face to face old fashion service direct to the client over the kitchen table.
Many of my client’s feel abandoned by the major banks. Unless they owe a $1M or more they are basically ignored by the Bank’s until something goes wrong.
The majority of my client’s are within a 6 hour drive and bounce of all the South Australian borders.
I meet with the majority of my clients each year on farm or at their place of business but the majority of contact happens via Skype, phone or email.
Technology lets my remote client’s down so trying to provide an interactive webinar or skype functionality is problematic.
My service is multi disciplined offering business/agri consulting, financial planning and mortgage broking. Maintaining 3 distinct licences is time consuming to maintain the required education and compliance standards many of which are duplicated.”
A lot of leads or enquiries that don’t close (mainly first home buyers) are just after information and are truly not ready. A lot of first home buyers don’t realise the amount they require as a deposit. They think 5% is everything. They aren’t aware of the additional 4-5% purchase costs (assuming no FHOG if they are not purchasing a new property) + LMI costs. I suggest to people that they really need approx 15% minimum which ends up at close to a 95% lend.
Applicants often become clients, with a few not buying a home or sourcing finance from me. Why ? The people who don’t proceed are caught in an affordability trap where they simply don’t have either the deposit or income – required to service a loan. They want to buy but choose to continue to rent. Some people of a different culture like the lowest rates in town and will switch lenders at the drop of a pin. They also want a part of my commission for the priviledge to me of having them as a client, and yet can’t be found if I suffer a clawback. I rarely see clients with bad credit and hence no impact here. Some people compare me to other brokers and may prefer another broker. I do what I can do.
servicing is becoming tighter and tighter. Lenders limiting rental income. Assesment rates way above actual rate. Income amounts being watered down (overtime, commission etc only using 80%) Not using actual repayments on other investment loans but adding a buffer for example if they are paying Interest only the banks sometimes use P&I as their actual repayment for other debts.
Mortgage broker’s service is no cost to clients so most of the time Clients don’t value this service. We are intermediary so at the end everything depends on buyers and lenders to settle a loan. There are so many mortgage brokers now a days anyone can become a mortgage broker so its very hard to survive for average mortgage brokers.People value the service of plumber because they charge them $200 or $300 for one visit here service is no cost to clients mortgage brokers are ready to waste time and resouces for free even after unqualified clients ,ready to meet clients at any time any place so day by day this industry is going to be worse for Mortgage brokers.
Actually, I don’t have any biggest challenge when I am closing new leads. The initial appointment with clients are very important. Different clients have different scenarios, if I am confident to deal with their cases, I am commitment to do my best to settle the loan and provide ongoing services after loan settled.
The biggest challenge is getting people to remain committed once they start the process. So many get pre approval and never buy or get an investment strategy nd never put it into action. | The biggest challenge is getting people to remain committed once they start the process. So many get pre approval and never buy or get an investment strategy nd never put it into action.
I have more trouble securing new leads than closing them. As a financial planner and mortgage broker is quite easy to mount a compelling case in the majority of cases to demonstrate real benefits for prospective clients.
Buyers under $700k, particularly first home buyers, are have a number of failed attempts at buying houses in the Brisbane market. Other than this, credit policy issues prevent / delay refinance opportunities.
A lot of my leads have unusual circumstances and require specialist lenders and often their circumstances will require additional info or details – when I request that info, they say they can provide it, but, then disappear. I’m not pre-qualifying my leads at present, nor do I charge an upfront fee.
“To be honest closing leads isn’t the biggest issue. The bigger issue is consistently generating enough quality leads to keep a consistent level of settlements.
But if I just answer the question the issue at the moment is that many lenders have tightened credit policy and deals that may have fit 12 months ago now don’t.”
“I established my independent Broker firm in Feb 16 – For LEADS via Real Estate sector; LEADS are akin to 2nd cold calling as consumers who look thru multi properties and multi agents. For example: I have a Real Estate Agent x 3 who refers circa 15 names of persons who walk thru open inspections per month for my follow up – Current strike rate is around 3 tangible conversations to which I carry about 3 ongoing opportunities: I rebate up to 20% upfront rebate to Agent, However, I am aware of other larger Adelaide Brokers fund up to 40% upfront.
Challenge for closing LEADS is consumers “”looking at property”” versus people who are and generally have researched their finance needs. aMy target market is SME Business up to 3m via Accountant network and ”
I’ll be very honest. I have a high conversion rate of 63% so closing leads isn’t a big issue but the deals that don’t go ahead is because applicants can’t service a loan. A lot of liabilities eg 3+ credit cards and personal loans which effect them being able to service a loan.
lacknof flexibility in lender policy. Partly driven by legislation, but mostly driven by lender “overinterpreting” legislation. At the end of the day, two principals shoulf apply. Firstly, is the transaction in the clients’s best interest and secondly is the risk sound. Many lenders work within the “technicalities” of the legislation rather than the “spirit” of the legislation.
Serviceability. The banks sensitised rental incomes, over time and allowances added with their assessment rates all combine together to make it near impossible for some. Now new living expenses calculations have been added!!
I often don’t struggle with closing leads. I work with a number of referral sources who I spend a lot of time training with. As a result most of my leads are already qualified and ready to buy. The main reason for leads not proceeding would be due to not qualifying. Whether this be due to lack of servicing, bad credit or not enough deposit.
The biggest challenge I find is as an independent unless you are a marketing savvy operated with plenty of cash behind you it is very difficult to put yourself out there and make you known to a public that has so many choices available.
“Customers confused about advertised rates and not being aware that they, as first time buyers and having minimal deposit do not meet the * special conditions to get that interest rate.
They then do not believe me and then go back to the bank or get schooled by bank sales people. ”
Borrowers particularly investors are reluctant to enter in to a purchase contract due to property market uncertainty
The biggest challenge has been a lack of income with new leads. They over estimate there ability to make the loan payments on there income but with servicing at 7 or 8% and minimum monthly living expenses they fall short.
The time it takes and the hours of work you need to spend to get the client to the point that they are ready to satisfy all of the lenders requirements.
not qualified lead… not enough saving, not enough earning… don’t want to get into debt… some people just call to check their situation but not serious
Biggest problem is finding enough people to engage with, the percentage that don’t use you if they do a property transaction is small. Of the small percentage that don’t use you the biggest thing is people going with the branch as they think it’ll be easier.
Bank credit departments for self employed. They just keep asking for more and more information. No consistency even within the same bank. A real feeling that they only want PAYG income earners as the credit managers have so very little skill in assessing anything else.
Generally the clientele I deal with are 2nd or 3rd home buyers and already have existing relationships with brokers, so getting them to see me as another option is the first task, but there are also rate chasers that fail to return emails and calls
I receive leads from all over South Australia. My biggest challenge is persuading those potential clients who live at a distance from me that I can service their needs without meeting them face to face.
I don’t really have any problems closing a deal – I fully qualify the client before proceeding to an appointment – this saves their time – and mine! My current conversion rate from Application – Formal Approval is 98%
Not enough deposit
Not enough stock in the market. We have a very high hit rate with new leads, however the trouble they have is actually finding a property.
I am finding that most people that come to me have been to the banks and been told they have bad credit so they come to me and don’t tell me hoping that I can get them approved, then the application fails once I discover their credit history
It takes time to build a relationship with a potential client. If they are not ready to finance you have to build the relationship and be patient. Brokers are not selling a product. You can’t pressure someone into a loan. We provide a service.
Either the client can’t get a loan right now & therefore we can’t help or they don’t commit whether they aren’t comfortable or don’t like the option put to them. This being said I close over 90% of enquiry because I keep in contact with them if they don’t buy from me right now.
My biggedt challenge is actually getting new leads not so much closing them. But if I was to answer your question, i would say that the biggest challenge is borrowers finding a property to purchase.
I’d say it’s a time thing and consistency in following them up and being always in their face with content and value add.
Generally most of my leads are left of centre. The biggest challenge is to align them with a lender who will approve their loan.
competition with banks, rates and other brokers offering cash incentives or part of their commission which I wont do
Clients not having enough deposit saved and unaware of full cost involved to purchase a new home
One of the main hurdles is the mountains of paperwork lenders require nowadays and some clients just get “worn out” with the whole process and just don’t go ahead.
“Not ready to buy, looking at other options online and other brokers.
Dont meet credit criteria 95% + LVR Lending ”
Clients having enough savings/deposit. We find a lot of people are not in a position to purchase what they want as they do not have enough money saved to cover their 5% approx.
Clients having enough savings/deposit. We find a lot of people are not in a position to purchase what they want as they do not have enough money saved to cover their 5% approx.
Misinformation on lenders websites re deposits and capping mortgage insurance, funds to complete
Educating clients that it’s not all about today’s interest rate as clients are being led to believe by loan comparison sites that it’s all about the rate, and it’s not.
Customer providing source documents and requirements to fulfil broker compliance for franchiser, over and above banks. Furthermore, customers shopping brokers.
Not many as we pre qualify clients, however uncertainty in regard to negative gearing
Customers that are generally curious with what interest rates are available or whether they are able to look buying an investment property. I find that only about 50% of these types of leads eventuate into a sale.
The serviceability is the biggest challenge. People think that they can borrow anything with any kind of income and when they realize that they can’t they turn shoulders off you
finding the correct loan and lender for the customer to match their paperwork, time frames and product choices.
Affordability and short term employment including 2nd jobs.
High cost of housing on the Northern Beaches/North Shore and serviceability of banks has gotten much tighter.
Educating clients about the long term value created through establishing a relationship rather than just focusing on the transaction.
THEY MAY ENQUIRY WITH BROKER AND WALK INTO THE BRANCH FOR MORE PRICING. SOMETIMES THE BROKER’S PRICING IS LESS THAN BRANCH, THEN THE CLIENTS WILL CHOOSE BRANCH TO PROCESS THEIR LOANS INSTEAD OF BROKER.
Most clients we deal with are in a position to purchase, demonstrate sound asset position however after approval, we are finding short valuations hinder the closing of the leads.
Lender retention team trying to retain current facility. I position the reasoning well in advance of submitting a new deal
Managing to get out on the road to generate leads and do all of the admin/compliance that now comes with the role.
I don’t have any issues closing any lead as my main stream of new business is referrals from my existing database.
its harder to get loans to pass the banks serviceability models.
Waiting for the bank to make a decision
The single biggest challenge is not closing; it’s getting leads.
They have limited or no savings
turn around times and service levels by banks resulting in unhappy customers
Mostly not contactable. No Savings. Just checking not ready to buy.
Owner Occupied – Reluctance to commit, lots of uncertainty, not ready,
Not being able to get price as quick as client expected.
Changes to lending criteria, leading to servicing failures.
Your research is regarding mortgage broking and this is a very nominal part of my portfolio as I am an Asset Finance/Equipment broker
Clients who are talking to 4 or 5 brokers at the same time. Then take the information and go directly to the lender
Poor service levels from lenders and the amount of compliance we need to complete as part of the process.
Adjusting borrowing expectations in light of APRA effects on bank assessment.
Responsible lending rules