Mortgage Broker Clients: Why Mum & Pop Are So Awesome
There are many different ways of classifying the customers for mortgage brokers in New Zealand, but one simple way is to group the customers into non-distressed and stressed.
The non-distressed customers are generally looking for a bit of help to get a mortgage, but their circumstances are not troubling them and they may or may not proceed with a deal while they are working with the mortgage broker or even after they have been pre-approved for a mortgage. To find mortgage brokers in Rotorua click this link. These customers can be fickle, and it appears that on average only about 30% of these types of customers actually end up getting a loan, at which point the mortgage broker gets their commission. Brokers may spend days or weeks prodding and poking the customer and trying different solutions, only to have the customer change their mind and decide to postpone their house purchase or cancel it all together. Brokers dealing in this market have to be prepared for a relatively high failure rate, and even when success is guaranteed it may be two to three months before the customer takes up the mortgage and the broker gets paid. The broker’s cash flow management has to be pretty good.
Some brokers describe the non-distressed customers as “Mum and Pop” customers, and while the application process can be very straightforward and probably pretty boring, the fact that about 70% of these applications don’t complete further degrades this market sector in the eyes of mortgage brokers. Interestingly a very high proportion of those customers using the Internet to locate their mortgage broker are in the non-distressed category, and the small handful of very large broking firms that totally dominate this market (because of their high Google search rankings) need to have special admin staff to pre-screen the customers so that the less committed and the dreamers are weeded out upfront before the leads are passed on to the mortgage brokers.
The distressed customers are another group all together. In most cases the customers are in some financial trouble, possibly because of problems with rental properties or because of unanticipated expenses such as P contamination or a leaky home. In many cases if a tidy solution is not found then the customers may lose their property or go bankrupt or at the very least received a massive setback in their financial health. To find out more visit NZMortgageBrokers.org. A percentage of generally independent mortgage brokers specialise in helping these customers, and these brokers will generally have a trusted network of non Bank lenders and high net worth individuals. For the customer in general the most important outcome there’s a solution that stops then becoming bankrupt or losing their shirt, and they will have been turned down by a bank already. The brokers solution will generally involve more expensive money, but even a higher interest rate is way more acceptable to a customer than total financial failure.
Brokers specialising in this market can pick up leads by using Google Adwords and strategic ads that capture the attention of distressed customers. The banks and the large broking firms will generally not want to touch these customers, but for a competent broker this market segment can be pure gold. The customers will almost always take the solution that the broker comes up with, no matter how much higher the interest rate is, and the loan value will generally be a lot higher than for Mum and Pop customers because there is often large-scale refinancing involved. The brokers that service the sector can hide away out of sight of the rest of market and quietly make a killing.