Having worked as a mortgage broker in both a regional area and more recently a metropolitan area, I have witnessed first hand the multitude of differences that exist between the two.
Brokers considering making the jump from one market to another may think the transition will be done with ease, and while it certainly can, it would be wise to keep in mind that there are plenty of ways in which the two diverge, from the policies of the banks to the way in which a broker must operate.
From a lending perspective, it’s clear that in general banks are more willing to provide funds to borrowers in metro areas, for the simple fact that these properties can usually be sold more easily if the need arises, and therefore the bank is more protected. This is purely based on a supply and demand equation – metro areas have a greater population than regional and hence there is more demand for housing. In contrast, regional areas are considered to be riskier because the population is smaller and often more transient, with many people coming into the area for work and leaving if that work dries up.
I worked as a mortgage broker in the regional area of Gladstone for many years before moving to Brisbane, and it is this transition that really opened my eyes to the metro versus regional divide when it came to borrowing; a divide that has only been sharpened by the GFC. Indeed, in the years after the GFC, we saw banks become more restrictive overall in terms of lending, but in particular, regional areas were put under the spotlight. Consider the Gold Coast, for example, which many lenders would not touch for some time.
Not only are banks more willing to lend to borrowers purchasing property in metro areas, but they’re also less restrictive when it comes to their lending policies. Regional areas are often met with far stricter rules – for example lower LVRs may be required and workers will often have to have completed their six-month probation before they are allowed to borrow.
The other major difference between metro and regional areas when it comes to working as a mortgage broker is the community that supports you and your business. In regional areas the community is much smaller and you become part of it, so you end up having fantastic support, with people using your services and sending plenty of referrals your way. Word of mouth works incredibly well, and of course you must be consistently conscious of the quality of service you’re providing in order to ensure future business.
In a metro area, however, it’s much harder to be an intrinsic part of the community simply because it’s so much bigger. You can be involved in community activities in a metro area as you would in a regional area but it won’t have the same impact – you’ll have to rely more on advertising in order for your brand to become a household name.
This sense of community in a regional area can actually be of benefit to borrowers when they’re trying to secure a deal from a lender, and this is one area where things can go in their favour. Often they’ll have a face-to-face relationship with their bank manager, and the bank manager will likely want to keep their business due to the pool of potential borrowers being lower, so they may be able to secure a good deal.
Whether you’re a broker working in a metro or regional area there is one thing that remains the same, and that of course is the service you provide your clients. The most important thing is to ensure you know what the bank’s policies are in regard to lending and be able to provide the borrower with the best product for them. At the end of the day, a mortgage broker is as good as his knowledge about the market – if you’ve got the right knowledge, you’ll succeed wherever you’re based.
Ruan Burger, managing director, TIME Home Loans
Ruan Burger has been in the mortgage broking business for nearly a decade, starting out in the booming town of Gladstone after working in the banking industry for many years. He formed Time Home Loans early in 2013 after moving to Brisbane and the business has grown significantly since then.
Ruan is a nationally recognised member of the MFAA. During his career as a mortgage broker, Ruan has won – and been a finalist in – several awards. He won the MFAA Mortgage Broker of the Year award in 2012 and 2013 as well as the MFAA’s Award of Distinction in 2012 and was a finalist for the MFAA’s Credit Adviser award in 2014.
Ruan believes it is his ‘love of the game’, his strategic alliances and colleague morale that promotes his business as a leader in the field.
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