• March 31, 2020

Changing Market Good for the Industry

It’s a rising market and that should spell profit for mortgage brokers, real estate agents, financial planners and accountants

Yet, recent legislation passed in Canberra means that the way Australians source loans in 2020 will be different to before.

Under the recent changes, mortgage brokers will be legally required to work in the Best Interest of their clients – but it has not been determined what constitutes Best Interest. 

If the client wants to settle on a property rapidly, they may not be best served by submitting a loan application to a lender which is offering super-cheap rates and which consequently is being deluged with loan applications.

Surely a good broker will be operating in their clients Best Interest if they source a lender which has acceptable rates and which can settle on time without facing penalties?

Indeed, the Best Interest test could give brokers a competitive advantage over the banks.  After all, if a customer just goes to their local branch they may not be getting the best offer on the market.

Brokers who can articulate the benefits to the client of these new obligations stand to do well in this property market.

And, with industry expecting over 70 per cent of loans to be sourced through mortgage brokers, the legislation is due to have a profound impact.

 

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