Mortgage Broking as a Career

Amie Leffler, mortgage broker

Mortgage brokers come into the industry via a number of career pathways, although probably the most common is via the banking industry. A mortgage broker is required to have a deep understanding of the banks and their lending practices, and the requirements they place on all applicants before providing a mortgage. This is most easily obtained as a result of a career in the banking industry, which has its own language and areas of expertise that are a genuine mystery to the layman. Personally, I’d rather be a mortgage broker than being a real estate agent because its just better, dagnammit.

Sometimes mortgage brokers see the move from the banking sector to mortgage broking as a true promotion, and they see nothing but opportunity in front of them. Other mortgage brokers are unfortunately casualties of largely failed banking careers, and mortgage broking for them is largely a last ditch attempt at success. Generally the personal traits that made them a success or a failure in the banking industry also tend to have the same result in the mortgage broking sector.

A mortgage broker at a basic level needs to find clients who require a mortgage, and then they need to obtain a mortgage for those clients. It may take between 2 and 3 months or longer between finding the client and eventually getting paid their commission, and so they also need to be able to manage their finances during this gap. The challenge for a mortgage broker is to find enough clients to generate a healthy income. For mortgage brokers in Westland click here. The actual work in building a loan application for a client and chasing it through to approval by the bank is not is not really onerous, especially where the broker truly understands the needs of the banks and as well organised with application form templates and supporting letters etc. Most brokers spend most of their time looking for new clients, and this can involve extensive networking in the real estate industry. The truth is that most independent brokers could handle at least 5 times their current number of clients if they didn’t have to do any marketing for those clients.

The need for marketing can come as a rude shock for new mortgage brokers fresh out of a career in a bank. It will be a welcome shock if they are able to carry forward a solid reputation and leverage this as they network for new business, but if their name is not well known in their local industry then things could be pretty difficult. All brokers have classy webpages with which they hope to attract new clients, but this luxury is unfortunately reserved for a very small number of large mortgage broking firms who completely dominate the Internet search market. They have simply made a very large investment in Web Development hand specialist SEO.

Independent mortgage brokers can go and work for a large mortgage broking firm, where the leads may be plentiful but the work could be very repetitive and they will need to give away a large chunk of your commission to the firm. For more information, visit MortgageBrokersNZ.info.

How New Zealand Mortgage Brokers Came To Be So Awesome

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Ming Lee, independent mortgage broker

New Zealand has a very active Residential Housing market, and it has generally been recognised over the last few years that New Zealand has had a housing bubble particularly in the larger cities. Mortgage brokers in Hastings write about 40% of all mortgages in New Zealand, and the industry is very competitive.

However the competition between brokers is unlike other sectors where the players can compete on price and performance, as the mortgage broker service is always provided free, and as long as the client meets the general banking criteria for a mortgage then the client should get the mortgage of their choice. The only real way that mortgage brokers can compete is through brand recognition and through Internet search traffic.

Brand recognition is the traditional approach for any company who want to position themselves competitively in the market, and this is always expensive. The top handful of broking companies use television, newspaper and online advertising extensively, as well as billboards and other publicity techniques, and this will be a very large proportion of their total costs.

Over the last few years the importance of Internet search ranking has grown enormously as almost every potential house buyer will use Google search to choose their broker. A small handful of mortgage broking companies have recognised this as an extremely important source of new business, and have made the investments necessary to make sure they win the line share of all Internet search traffic. An expert analysis of Google search results demonstrate clearly that these companies have invested a lot of money in Web Development, web optimisation and most importantly in SEO (search engine optimisation).

For these companies the single most important goal it is to rank #1 or at the worst #3 for important search keywords. These companies recognised some time ago that this is a Winner Take All game, as the first three search slots will attract over 60% of all Internet traffic for that keyword. They recognised that simply spending some money to improve their Internet search rankings was useless as a strategy if it did not get them into the top 3, and so they spent serious money to make sure they did the job properly. SEO done very well requires a very large upfront investment and a significant ongoing month-to-month investment to maintain their search rankings. This of course pays back handsomely in terms of new business, particularly the first time buyers who are finding it difficult to navigate the process of getting a mortgage through their bank and do not know any trusted mortgage brokers.

The end result is that the new business coming in from Internet search is completely dominated in New Zealand and probably in all markets around the world buy a small handful at large mortgage broking companies who have had the resources to make the very significant investment to get their rankings into the top 3. The remainder of the mortgage brokers in Hawke’s Bay may also have spent a comparatively large amount on SEO and web development, but this is waste of money if they are not in the top 3 of Google searches.

Mortgage Broking for Property Investors

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Investing in property is attractive for many New Zealand home owners, because it is seen as a very safe way to make very good capital gains, and a very safe way to earn a very solid cash buffer for one’s retirement. Its important to get a successful mortgage broker to help you. New Zealand is unusual in the OECD in that there is no tax paid on capital gains when selling residential property, and in a rising house market it is easy for homeowners with a good income to raise a large mortgage to purchase a rental property. Under the current laws they will need at least 40% deposit, but this still means that any capital gains from their new property magnified two and a half times because they are conveniently leveraged.

Property investors flock to the housing market when there is a housing bubble underway, as they see that profits are virtually guaranteed. While there is an underlying core of rock solid investors who operate safely in any housing market, during a housing bubble a lot more Mum and Dad investors come into the market hoping to make a quick or even a long term buck. In a lot of cases these mum and dad investors naive, and are lead astray by unscrupulous actors who run courses and seminars demonstrating how easy it is to make lots of money in property.

The core investing community have all their main suppliers well and truly sorted, including their accountant, their lawyer, their mortgage brokers Manawatu and their favourite real estate agents. All of these providers will be providing excellent service, simply because if they didn’t then their reputation would be shot. For the new mum and dad investors however they are reliant on advice from seminars and courses about who is a good lawyer, accountant and mortgage brokers Southland, and often the advice they get is absolutely not independent. Into this mix comes a breed of mortgage broker who can see vast rewards for themselves in this market. They have all of their normal networks of banks and other lenders, and all they need is the customers, and so they make sure that they make it very easy for the mum and dad investors to be able to buy investment properties.

The unscrupulous brokers will resort to any lengths to secure a loan for their clients, and this may include tying the clients into loan deals with non bank lenders who could prove dangerous to the client down the track. The client may be told that they can’t get a normal bank loan but that the broker has a lender who will provide them with a loan but at a higher interest rate.

This can have the effect of making the new property cash flow negative, and can bring a lot of financial stress to the mum and dad investor don’t literally find themselves running out of money.

Another tactic that the unscrupulous broker may use it’s just simply exaggerating their clients ability to make the payments on the mortgage, or exaggerating the clients net worth. This can come up horribly unstuck for the client if they do fine they are unable to make the payments and end up with a mortgagee sale that effectively wipes them out financially.

Residential Mortgage Broking in New Zealand

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Mortgage brokers are vital for the residential property market in New Zealand, and given that the vast majority of New Zealanders’ investment is in their own property then the mortgage broking sector takes on even more importance.

Brokers are really acting as an efficient go-between for house buyers and Banks, as they do a lot of investigative work into the house buyer on behalf of the bank, and they do a lot of analysis of the banks on behalf of their house buyer clients. However in the big scheme of things mortgage brokers Christchurch have a much larger impact on the residential property market, in two main areas. Firstly, they help people get mortgages who otherwise would struggle because they do not understand the process and what was required. Secondly they help people get mortgages who otherwise would not qualify because they do not meet the banks minimum requirements.

In both cases the mortgage broking sector is growing the market for people who purchase homes, and this is having a major impact on the house prices in New Zealand. Most casual observers would consider that the role the mortgage brokers are playing in New Zealand is to help those people get a mortgage who otherwise would not understand the right process, and this is the popular image of the mortgage broker. They are skilled and understanding the banks requirements, and understanding how the banks like the clients to be presented to them in the paperwork, plus they are skilled in understanding the myriad of lending products that the banks produce in order to largely confuse the market.

Mortgage brokers Canterbury generally come from the banking industry, and they deeply understand how banks think and what the underlying pressures are that makes the banks and their lending management behave the way they do. So for example the mortgage broking sector will have a pretty clear idea of the impact of any announced change in policy by any bank, and they will be able to advise and help their clients accordingly. Most importantly the mortgage brokers understand what weighting that the banks place on any particular information about a client, and they understand how best to prevent the clients information in the best possible light to the bank.

This does not mean that the broker will be inclined to make untrue statements on behalf of a client, but rather they will understand how to rank the various information on the client application in order to capture the attention of the bank and give the bank comfort about the client. The mortgage broker is naturally very motivated to find a solution for the client, because if they don’t find a solution then they don’t get paid by the bank. Brokers are also motivated, or certainly should be, to ensure that they understand their clients financial situation clearly, and that they do not advise the client in a manner that will cause the client financial problems down the track. Regulations put in place in 2011 were to make sure that the brokers perform professionally when advising their clients, and this included requiring all brokers to pass difficult financial examinations and also to be part of a comprehensive complaints and dispute resolution process.

What this means for the banks is that in general mortgage brokers are feeding them new business that the banks otherwise would not see, and the new clients have been well vetted and qualified by the mortgage brokers.

The Arborist’s Wood Chipper

Commercial arborists specialise in clearing trees and scrub very efficiently and safely, leaving the land behind ready for whatever new purpose it has. Amongst the many highly specialised and powerful machines that the arborist has in their toolbox, the industrial strength wood chipper has to be one of the most impressive.

This machine is powered by its own diesel engine, and is capable of completely demolishing a 10 or 15 metre log of around a foot in diameter in just a few seconds. These machines are totally portable, and the resulting wood chips are fired like bullets into the back of the covered truck. To the casual Observer the wood chipper appears as a scary Beast, and this is reinforced by the fact that the machine is only loaded by the digger, and the wood chiiper machine operator stands back at least 20 metres.

The diesel motor driving the machine runs at high speed, and it’s main task is to power up a massive flywheel that will deliver power to the chopping/grinding wheels. The machine will literally suck in the logs and squirt out the wood chips, and for reasonable diameter logs of just a few inches the machine will do this in one continuous motion. Larger logs up to a foot in diameter will cause the machine to stop and start frequently, but the reason for this is that the machine is waiting for the diesel motor to spin the flywheel back up again. It is the flywheel that provides the massive horsepower that means that the machine does not stall.

With a skilled digger grabber operator feeding the machine continually with massive branches and tree trunks, the truck can be filled with wood chips in a matter of minutes, and while it is away emptying the load the digger driver can reposition other logs and scrub so that it can feed this into the wood chipper once it returns. The best arborist Hamilton has ever seen would do well to use this impressive tool.

The wood chipper is incredibly impressive to the casual observer who may have used a garden shredder at some stage. The garden Shredder is very easy to stall with only a small handful of twigs and leaves, and next to a fully fledged wood chipper the garden shredder looks like a paper dart compared to a Boeing 747.

Feeding the wood chipper with the digger and grabber is a very safe way to operate, but it can come unstuck if the digger driver and the truck driver are not on their toes and carefully observing every load. It has been known for the digger to accidentally pick up a large object like a piece of railway line, and this can basically destroy the wood chipper if it is fed into it, causing thousands of dollars of damage in a fraction of a second.

House Building Apprenticeship in New Zealand

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There is a massive shortage of new homes in New Zealand and a corresponding very high demand for builders. Builders need helpers both unskilled and skilled, and commonly builders will take on at least one apprentice.

An apprenticeship is a very good pathway to a lucrative and enjoyable career you’re a smart and hardworking young builder. The apprenticeship means that the young builder gets good on the job training and experience, plus he or she gets to go to classes to learn about good building practice and modern techniques and from there they can get fully qualified.

A good building apprentice may take 3 to 5 years to come out of your apprenticeship, but they were generally have been fully employed and paid during this period, and they will come out with a qualification that means they can go into business on their own if they want to. This is very different two young people who have chosen to go to university, because not only will they have not been paid while over at university, they will generally have accumulated a large debt which will take them sometimes decades to pay off.

A building apprentice can come out of his or her apprenticeship by their mid twenties, and at that stage not only be debt free but they can also have accumulated enough money to make a deposit on a new house or to buy a nice car etc. They are also allowed to build your own home in their spare time, and many building apprentices have this as their major financial goal. This is because they can build the house for vastly less cost then for the average homeowner as they will absorb all their own labour costs plus they will get the full trade discount on all of the materials. If they have chosen the house location and design well, then they will see a very significant capital gain over a short time frame, and builders commonly sell their first time at a very significant profit. If they are smart then they will pull this profit into the deposit for the next house, which will generally be much bigger and more expensive, and could be there long term family home or could be used to sell off for a much larger profit.

In fact legally registered builders are only allowed to build two homes for their own use in any 10-year period, but if they are smart they can accumulate a few hundred thousand dollars over this period, and a million or more dollars over their building career.

A building apprenticeship pathway to an outdoors and indoors lifestyle, is building a new house requires laying foundations, sitting up the frame, installing the roof and the cladding and all the window and door Joinery before installing the lining and finishing off the house. It is a very varied occupation that is highly skilled and requires a great deal of knowledge about good building practice, but it can also be very lucrative for the Builder that knows how to play the game.