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The time it takes for a broker to write a mortgage has increased by around five hours per file, new data from BrokerEngine has revealed.
Broker software fintech BrokerEngine has revealed new data showing that the average time taken to write a home loan has increased by five hours over the past five years, expanding out from 15 hours’ work to 20 hours’ work, today.
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By assessing the time the average deal takes to go from initial contact with a client to settlement, BrokerEngine found that the time taken had been lengthening in recent years.
The software company said this was based on ‘best practice’ tracking a sole broker across providing details advice to the client, following up with lenders, and “fireproofing” the deal.
Speaking to The Adviser about the reasons for the expanding time frame, BrokerEngine co-founder Craig Vaughan from MAP Home Loans, said the compliance burden was largely to account for it.
“The heavier compliance burden that’s been implemented over the last five years and the detail review of living expenses are the main reasons for the time growing,” Mr Vaughan said, noting that in the five years between 2018 and now (and particularly in 2021) the broking industry had come under the best interests duty as well as a raft of other reforms.
According to Mr Vaughan, over the past five years, different stages of the loan writing process have been lengthened at different times.
During the COVID-19 pandemic, for example, blowouts in lender turnaround times had resulted in more time being added to the settlement process.
While most lender turnarounds have now standardised with the adoption of technology, the main delays are now coming when brokers are “workshopping the deal” to determine which lender and credit policy is the best fit for their client.
While he noted that tech providers such as Quickli had made the process easier (negating the need to go to individual lenders), the initial phase of working out where a client could go for their mortgage was getting longer, particularly now as borrowing capacities have tightened and living expenses are increasing amid a rising rate environment.
“With interest rates going up, it’s taking brokers more time and work to look at serviceability and get it accurate, because there isn’t much ‘fat’ or buffer there anymore, compared to even just six months ago,” Mr Vaughan said.
Mr Vaughan suggested that the time to settle a loan could increase as rates continue to rise and more borrowers roll off their fixed-rate terms onto higher variable rates.
The BrokerEngine co-founder said the company was now working on expanding integrations with more aggregator CRMs to reduce the double handling of data and “doubling down on workflow, teamwork and delegation tools” to help brokers free up time.
He said he hoped BrokerEngine would become the “best in market for automation”.
Mr Vaughan commented that brokers could be freeing up more time by “automating as much as you can and delegating the rest”.
The BrokerEngine founder highlighted that many brokers utilising the CRM had success shaving down the average time to yes by using tools such as BrokerEngine in tandem with their own aggregator software and fintechs like Quickli, Sherlok, and Effi.
He concluded: “And, of course, hire early to get people to actually drive those tools for you and do some of those non-client facing activities”.
[Related: Aggregator acquires broker software business]
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