Mortgage Broking as a Business
Any mortgage broker in New Zealand needs to be fully qualified and registered financial advisor, and this alone requires a high degree of financial and time commitment. Mortgage broking as a career cannot be taken lightly.
The mortgage broking business is somewhat unique in New Zealand, in that the broker does not charge the customer any fees, but is instead paid a substantial commission once the customer has uplifted the loan. While the payday may be substantial, the time between signing up the customer and getting paid can be many months some cases. And for the broker in New Zealand, on the average only 30% of new customers end up earning the broker any commission.
The broking business requires careful cashflow management as well as the other obvious skills of marketing, networking and financial advising. Find out more about mortgage brokers in Timaru. In some respects mortgage brokers are like the dairy farming sector, as farmers are always banking any unexpected or particularly good profits because they know that good times never last. The mortgage broker really needs to take the same approach.
Mortgage brokers obviously prefer to take clients from the very large cities with the very high house prices and high mortgages, as the commission payments can be double or even quadruple the payments that brokers will be getting in the smaller centres. However there is large competition for this business, and unless the broker is tied to a large mortgage broking firm with a very expensive marketing budget and successful SEO Internet advertising campaign, then they will not see much of this lucrative business. Of course the disadvantage for mortgage brokers working for the very large companies is that they have to take the work that is given to them, and often the work is fairly repetitive although lucrative.
The large mortgage broking firms generally find they have so much new business coming in through the door as a result of the Internet campaign that they can afford to put administrative staff at the front end to filter out all but the simplest customers. This is not truly ethical but it absolutely goes on, simply because there are so much money to be made by the very dominant large mortgage broking firms.
Smaller independent brokers need to have other sources of new business, but this always means that they need to provide good service at all times, because their good reputation has such a huge influence on their livelihood.