Mortgages for Stressed Clients

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Michelle Ling, mortgage broker

The vast majority of customers for mortgages are first time buyers, existing homeowners who want to upgrade to a new home or move, or existing home owners who want to buy an investment property. For mortgage brokers in Rangiora click this link. These buyers are generally fairly straightforward – around 60% of them deal directly with their bank for their mortgage and around 40% use a mortgage broker.

These clients will generally be accepted by the banks if they meet certain criteria that are pretty well publicized, around their combined annual income, the amount they want to borrow, the deposit that they have for the new house and their credit rating. With a client misses out on getting a mortgage then it will almost always be because of one or more of these four factors.

Some clients run into financial difficulties which can impact on their ability to make mortgage repayments, and this can be very dangerous financially for them because it may mean that they lose their house. Thanks a fairly hard-nosed about customers who get into arrears, and if the arrears have been for more than 3 months in the customer’s credit rating is damaged to the point that no Bank will want to do business with them.

There are mortgage brokers who will try to assist these customers, but because the circumstances can be rather dire then the cure that the mortgage broker proposes could seem very severe to the customer. Sometimes losing their house is an easier solution than alternative cures.

This situation often occurs during marital separation, when the parties are not talking to each other and not thinking clearly, and don’t take care of the mortgage repayments and other debts that are growing. This can be an unplanned tragedy that comes on top of the marital separation, particularly if the grieved party did not know that the other party was not looking after the mortgage repayments as they normally do.

This can be a difficult situation for a mortgage broker to sort out, but specialist brokers can also have specialist lenders on their books who are prepared to step on to help these types of customers, but obviously expecting a much higher interest rate in return. These specialist lenders are generally high net worth individuals who are prepared to take on added risk for increased return, and who also prepared to roll up their sleeves and get heavily involved in the deal. Visit this website for Te Awamutu mortgage brokers. They can for example offer to purchase the property of the homeowner and then rent it out to them temporarily while the homeowner sorts out their financial situation.

Struggling Mortgage Brokers and Why We Love Them

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In all industry sectors there are successful individuals and less successful individuals, and this is certainly so for the mortgage broking sector. The mortgage broking business is pretty well unique, as a large percentage of the brokers’ time in arranging finance for customers can go to waste because the customer simply does not complete the transaction for various reasons. Brokers not only need to allow for the fact in their financial planning that up to 70% of their work can fail, but they also need to allow for the delayed payment of the commission which is only made once the customer uplifts the loan. Brokers can easily wait 2 to 3 months for this to happen.

Jocelyn Laramie, mortgage broker at NZMortgageBroker.net

In a tightening housing market everybody involved starts to suffer, including the real estate industry and the mortgage broking industry. Obviously there are successful individuals that will always do well, simply because they are either work harder or smarter or both. In the mortgage broking sector there are a small number of large companies that totally dominate the market, particularly the Internet search market. These companies have a multi-million dollar marketing budget, and a large chunk of this will go towards making absolutely certain that their website ranks in the top 3 for all the major mortgage brokers search terms.

The advantage for these large companies is that they can capture 30% or more of the web search market, and so even in a significant downturn they will still have customers pounding on their door wanting service. These broking companies need to have specialist admin staff to pre-screen or callers so that only the most straightforward customers are passed through to the mortgage brokers.

All the other mortgage brokers who are not ranked in the top 3 four major Google search terms are left with the crumbs under the table in terms of market share, and they will all need alternative marketing strategies to make certain they have a continual inflow of new business. If you’re interested in mortgage brokers Wellington click here. These mortgage brokers will generally find it more difficult during a downturn, and will need to have careful cash flow management strategies to make sure that they get through any downturn unscathed.

Those brokers need to be careful that they don’t make mistakes and spend money unnecessarily to generate new business. They may be well aware that their website is attracting virtually no new business, but it would be a big mistake for them to invest in web development and specialist SEO, as it is almost impossible for them to break into the top 3 Google search rankings, which are the only rankings that matter. Web developers and specialist SEO companies can make a killing providing expensive solutions for companies that really have no hope of achieving what they really want.

Mortgage Broking as a Business

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Mortgage broking can be a very lucrative business, provided the broker is getting enough new clients through the door and the value of the loans is high enough. For example, if a broker is successfully processing 10 clients per month and the average mortgage is $300k, then the broker’s monthly income will be $19,500, or $234,000 p/a. The actual time spent processing each mortgage will be as little as 2 hours if there is no travel involved for the broker, and in this case the equivalent hourly rate is $1000 per hour.

Carolyn Flores, mortgage broker at NZMortgageBrokers.org

The reality is that not all mortgage brokers are doing anything like this volume business, but there still are many that are achieving this and they are becoming very wealthy. For new brokers entering the industry they need to choose whether to stay independent or whether to join a larger broking firm.

The advantage of joining a large broking firm, if it can be arranged, is that the firm will provide the broker with a regular supply of new clients, and generally these clients will be pre-screened in order to weed out the less profitable clients and the more difficult cases. For the broker this obviously means a steady supply of work, but there may not be many interesting challenges in the work and it will seem repetitive, plus they will need to pay a sizable percentage of their commission to the broking firm. For more information about mortgage brokers Whakatane click here. Also mortgage broking firms tend to tie up their brokers in tight contracts that basically prevent them from leaving the firm and setting up business in opposition.

A new broker setting up business on their own or with one or two others will need to make certain that they have a ready supply of new clients, and this can be one of the biggest stumbling blocks. The clients they get will generally have more challenges included and the work will be interesting, and a key benefit will be that they get to keep all of the commission, but they may find it very difficult to gain the number of new clients they need. For independent brokers this can mean being very proactive buy networking with the real estate community, developers, property investor groups and at home shows for example. It can be a lot of hard work but if they can set up a steady supply of new clients in the work will be very worthwhile.

One avenue of new clients that is generally not available is those clients resulting from Internet searches, as this market is totally dominated by a small handful of large mortgage broking firms who are ranked in the top three for the major mortgage broker search terms. This is a sad fact of life for most small and independent mortgage broking firms, and is made even more difficult to accept once they understand that for the high ranking companies the leads are coming thick and fast.

Mortgage Broking in the Fishing Industry

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New Zealand has a relatively large fishing fleet the size by population, and fisherman are always upgrading their boat or fleet, upgrading equipment for entering or leaving the industry. In almost every case the fisherman or fishing company will require specialist finance to make their purchase.

Nicole Gray, professional mortgage broker

The fishing industry in New Zealand is highly regulated, and this means that the fishing boats all need to be fully equipped with the proper safety equipment and the correct fishing equipment, and this does not come cheap. All but the very cheapest of boats will cost at least $500,000, and a large proportion of the New Zealand fleet is worth well over $2,000,000.

Fisherman and fishing companies will need a good relationship with their bank, and this may extend to obtaining mortgages for purchasing new boats and equipment. However there is still a strong need for specialist mortgage brokers who understand the ins and outs of the fishing industry even to make sure that their clients get the best deal on the market or are properly advised. Visit this link for mortgage brokers Wellington.

The fishing business is quite complicated, as there can be long gaps between catches, and their revenue can come in very short intense bursts. The business requires careful cash flow management, and an efficient company needs a good accountant and a compliant bank to make sure the financing of their day-to-day operations proceeds trouble-free.

The mortgage broker task can be quite complex, as they need to make certain that any purchase the fisherman makes is sensible business, and hence they will need to be able to provide a very good business plan and balance sheet supporting any application for a mortgage. An accompanying vital requirement for a mortgage in the fishing industry is the appropriate insurance supporting the lending, and a good mortgage broking firm will also have and insurance broking arm to provide this service.

Many fishing businesses are seasonal, especially during mid winter when it may not be practical to go out as often as in summer. Also the fish stocks themselves can move in and out of the fishing zones, and so the business model for the fisherman needs to be able to cope with sometimes fairly extreme seasonality. The mortgage broker will need to be able to weigh all the risks up including the seasonality and the very high operational costs associated with a fishing boat especially relating to fuel. This is a complex business and only experienced and committed mortgage brokers succeed. Go to NZMortgageBroker.org for more details.