Mortgage brokers work in a highly competitive and ever-changing environment. With pressure building on the reserve bank to raise interest rates and preferences of homes owners changing, mortgage brokers need to be on top of the shifts in the market and adapt to entice clients. With the new year upon us, there are six crucial lending trends that agents are likely to experience in 2018:
- Home loan repayments to boost
The financial markets anticipate the RBA to begin raising interest rates in 2018. This implies payments may also increase, as borrowers attempt to pay off more before the anticipated rate rise. With any rate increase, borrowers will probably consult their brokers to make certain they’re receiving the very best rate they can and maximise the value of their loan.
- Property prices to cool down
Banking regulators wish to see a slowdown in home price increase, and that is what we can expect in 2018. Limits on investor and interest-only loan expansion may stay for the near future, which might continue to dampen investor action and lower property rates. We are seeing this intervention beginning to take effect. Agents will continue to play a vital role in describing the ever-evolving regulatory changes impacting property investors and informing them of their best financing alternatives out there. With the dampening of prices, brokers can expect more clients entering the market due to increased affordability.
- First home buyers to make a reappearance
With investors taking back a step, first home buyers might find more chances in 2018. They’ll continue to benefit from aggressive rates of Interest, new concessions (if qualified) and ample flat inventory, although checks must always be made to guarantee quality purchases. With first home buyer activity, agents can expect to invest additional time with their first-timer customers, training them throughout their buying process as they attempt to break into the property market.
- Upgraders will continue to extend and renovate
We have seen a significant growth in renovation loan requests from 2017, a trend that we are very likely to see continue into 2018 as families decide to re-establish over moving. Upgraders are preventing exorbitant moving costs like stamp duty. We are seeing a few more top-ups as individuals take advantage of reduced rates of interest and leverage the excess equity in their home to be able to fund renovations.
- Owner-occupiers to acquire from aggressive lending rates
With limitations on investor and interest-only profits, banks have been competing within a smaller portion of the lending plate, and so are offering some fantastic bargains for owner-occupiers. Agents may see more customers do it, stimulated by increased advertising action among banks.
- More competitive intensity among brokers
As brokers establish their footprint in the market and grow their business, they can afford to invest more in marketing and personnel. Brokerage is a highly personal profession and clients are looking for professional and helpful service as well as the best rate. Brokers must differentiate themselves with a stand out mortgage broker website to attract clients and ensure they are up to date with all the latest mortgage broker marketing tips and trends of the digital age. Without a strong online presence, you will be missing out on business from millennials who are increasing in numbers as first home buyers. Buyers could simply turn to the big banks for a loan, but choose a mortgage broker because of the individualised characteristics.