Mortgage Brokers in a Market Downturn


Hannah Lu, mortgage broker

In any property market downturn only the very best real estate agents cruise through unworried, with everyone else being forced to tighten their belts and in many cases for the less successful agents forced to take on another job meant time.

The same is very true for the mortgage broking sector, especially in New Zealand right at the moment where there is a very definite flattening of the market. The tightening of the bank lending rules by the government and the reserve bank there’s finally kicked in properly and done the job that it was supposed to do which is to stop the incessant rise of house prices in the larger centres. The banks are obliged to limit their lending to residential customers with a 20% deposit, although first home buyers with a relatively low income may qualify for a loan with a 10% deposit. Property investors are even harder hit as they need to have a 40% deposit for every new property they purchase.

Many mortgage brokers serving the property investment market will still probably be ok, as some will have regular clientele who have high net worth and are experienced investors and so are not caught out by the current borrowing restrictions. These clients will instead see the flattening of the market is a unique buying opportunity, and so will probably be even more active than usual.

For the vast majority of mortgage brokers any downturn in sales creates cash flow difficulties for them, and they will have to work even harder to win new business while at the same time tightening their belt. There will be some exceptions however, including those brokers high on the pecking order in a handful of very large mortgage broking companies that are always at the top of every Google search for a mortgage broker. These companies generally get so much business flowing in through the door from the Internet that they can weather any storm. Normally they will prescreen any callers to make certain that they only accept clients who are slam dunks, but in tight times they can expand their acceptance criteria. Visit for more information.

For the large number of independent brokers vet find a web site nowhere near page 1 and Google searches, belt tightening will be essential as well as making absolutely certain that they provide brilliant service to a new client, see a future depends wholly on referrals and repeat business. For Hastings mortgage brokers click this link.

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