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If you’re a broker, you’ll be getting used to the concept of change. That’s because the finance market is shifting, and new regulations are shaking up the way the industry operates.
The introduction of APRA’s investor lending restrictions is an obvious example. This has seen the banks increase interest rates on investor loans, which, as you can imagine, hasn’t been well received by customers.
It’s even been reported the banks have had tens of thousands of customers ask to reclassify their loans from investor to owner-occupier, which is taking time and effort to sort out.
Then there’s stress testing. In recent months, brokers submitting investor loan applications to some lenders have seen their clients being subjected to stress testing on the monthly payments for their existing investment loans, as well as the new loan.
This has the consequence of altering serviceability results and potentially decreasing the borrowing level, which, in a competitive property market, can be the difference between closing the deal with your client and not.
Because of the nature of what brokers do, they will always find themselves at the centre of any industry change. Preparing for the new normal – an environment where brokers need to be acutely aware of how to best service their clients – is something they need to embrace. Thankfully, there are alternatives.
Mainstream lenders like Liberty are well positioned to offer high-performance investment loan products, both in terms of rate and flexibility of lending criteria. If you've got a client who wants to invest in property and has an existing portfolio, you’ll need to look beyond the banks to lenders like Liberty, which have a more free-thinking approach on how to treat existing investment debt. If every dollar counts, then it may be time to put other lenders in front of your customers.
Knowing your options as a broker will always improve your outlook, but finding a partner that’s just as determined to embrace change and forge ahead in the industry is even more important in times like these.
Liberty, and its wholly owned distribution arm Liberty Network Services (LNS), is well positioned for the new normal of constant industry change. With a range of products, solutions and services supported by the latest technology and marketing, LNS is designed to continue to meet the needs of investors and home buyers.
As LNS continues to grow, and Liberty is firmly established as an attractive alternative to banks, being a part of this network will help advisers and brokers stay nimble to grow their businesses.
It’s been quoted that those who are the most responsive to change are the most likely to survive, and in many ways this quote rings true. Despite a market that is likely to change again soon, there is a positive outlook for brokers, but only if they embrace it with open arms.
Brendan O'Donnell is the managing director of Liberty Network Services.
