What does a Mortgage Broker do?
Mortgage brokers are professionals who assist people in purchasing a house or property. Among the many services they provide to a buyer, the mortgage broker will assess their client’s financial situation, discuss their goals, explain the requirements necessary to help achieve the goal, and walk their client through the process of getting all of the steps successfully completed to purchase the home or property.
Essentially, the mortgage broker identifies and recommends the best mortgage products, or financing options to the borrower. After an in-depth assessment of the client’s financial situation and needs, the broker will research to identify the best products available from the banks or lenders, and present the information to their clients. After being presented with the best options, the broker and client will discuss which product best serves the client’s needs. Based on the legal requirements, under the National Consumer Credit Protection Act, brokers may not recommend a product that is unsuitable for their client.
Once the best product or loan is chosen, the broker will provide their client with a list of all of the necessary documents required to provide the banks or lenders in order to obtain the financing. These documents will include identity verification, credit history, income information (such as payslips, bank statements, etc.), level of debt, and any other documentation required to apply for the mortgage. The brokers will assist their clients with the forms, and act as the intermediary between the client and the lenders to facilitate the mortgage processing.
Great brokers have streamlined this process for their clients and have their own support staff to assist them. By simplifying the process for the clients, a broker has an opportunity to increase their sales and grow a strong network of clients. It takes effort, but if you are willing to work hard, apply yourself, consistently upgrade your skills, and you want to increase your earning capacity, becoming a mortgage broker is a very rewarding career.
“What can a Mortgage Broker Do for me?”
Mortgage brokers should get used to answering this question. Applying for a home loan can be an intimidating, daunting, time-consuming, and even a frustrating experience – even if this is not your first time applying for a mortgage. Being able to clearly and easily answer this question to a client, or potential client, is an important skill that could be the difference between signing up a new client or losing a potential client.
A mortgage broker can make their client’s experience much easier for them. By taking care of the complete application process by organizing the documents, speaking to the banking institutions, and pushing the process along, the mortgage broker acts as their client’s only point of contact from step one, and all the way up to the settlement and beyond.
Mortgage brokers can make the home loan process stress free for their clients. Based on their vast knowledge of credit policies, being able to find the “secret” policy exceptions to get even difficult applications approved, and their relationships with banking institutions, mortgage brokers provide a valuable service to home buyers. Clients with bad credit, unusual employment situations, and even non-residents can all benefit from the skills and relationships that brokers have established and maintained within the industry.
The best mortgage brokers can negotiate great pricing and provide multiple offers to their clients based on their strong relationships with key decision makers at the banks. In fact, many successful brokers have prior experience working at lending institutions in the credit departments, which means they have a comprehensive understanding of many different products from beginning to end. This means they know what information the banks want to see in order to approve a mortgage application, so their clients have a better chance of getting approved for the mortgage the first time around.
Skills and Tasks
In order to become a successful mortgage broker, the skills you must have include a comprehensive understanding of the home buying and mortgage application process, knowledge of the different types of loan products available, a strong understanding of the banks’ home loan interest rates, the banks’ mortgage lending policies, the ability to read financial reports & statements, great computer skills, including accounting based programs, and persuasive sales skills.
The tasks performed by mortgage brokers on a daily basis include assessing the client’s ability to borrow money for a new house or property, explaining the home buying process to clients, educating clients on the structures of mortgages and loans, communicating different mortgage options & bank offers to clients, calculating mortgage repayment programs, acting as the liaison with the banks on behalf of the client, being the point of contact for other key parties for your client (such as lawyers, real estate agents, valuers, etc.), completing the application forms for your clients, and organising other key pieces of information on the client’s behalf, such as building reports, home valuations, and organizing insurance for them.
There is no specific secondary education required to become a mortgage broker, however, it is recommended that you become a member of the New Zealand Mortgage Brokers Association. (Also, see Requirements For Mortgage Brokers in New Zealand for additional licensing requirements.) One should have very strong skills in the following areas: accounting, math, economics, finance, and English. Other critical qualities include being honest, well organised, trust-worthy, be able to keep confidential information, be self-motivated, unbiased, have excellent communication skills, be persuasive, possess strong time management skills, can work under tight deadlines, and be able to handle pressure.
Mortgage brokers need to have flexible hours, as it is necessary to meet the time availability needs of their clients. Although it does require working weekly in an office, it also requires being available to travel TO the clients at their homes or workplaces. The hours may also include nights and weekends.
Mortgage brokers are often self-employed and are compensated by the commissions they receive from the banks their client’s use to provide their loans. These commissions are paid to the mortgage brokers at the time of the loan settlement.
Requirements for Mortgage Brokers in New Zealand
In order to qualify to become a mortgage broker in New Zealand, you must become an Authorized Financial Advisor (AFA’s). To become an AFA, you need to earn the National Certificate in Financial Services – Financial Advice (Level 5), receive authorization to practice from the FMA (Financial Markets Authority), register and join with a Dispute Resolution Scheme (DRS), and be registered with the Financial Service Providers Register (FSPR). Mortgage brokers should also consider insurance options.