Mortgage brokers come in all shapes and sizes, and serve different parts of the financial sector and different classes of customers. In all cases the broker is there to help the customer or client find the best deal out of a range of deals from a number of leaders, and then to present a case on behalf of a client that means they get a mortgage from their chosen lender.
Many brokers work in large mortgage broking companies or franchises, and generally all their work will come in through the franchise office. While means a steady supply of new clients in business, the downside is that they must pay the franchisor a significant commission for each new client, and there will always be restrictions preventing them from taking on clients outside of the franchise operation.
Mortgage brokers in small centres tend to end up in franchise operations simply because it means a reasonably reliable supply of business, but they are not necessarily happy doing this because it can mean reasonably tedious repetitive work and a lot of inflexibility.
There are also a large number of independent brokers throughout New Zealand, particularly in the large centres. These brokers will have had to build a substantial Client List over the years by networking aggressively with real estate agents, contractor’s and Banks, and by providing particularly good service so their clients are happy to provide references and happy to return for any repeat business. In general the quality of service offered by the independent brokers is significantly better than for those working out of franchises, simply because the independent broker is motivated to take on any business where there’s a possibility of success, and then to work very hard to make that success happen. Mortgage brokers inside a franchise operation will almost always just take on the easy work that is guaranteed of success, and they just do not need to take on the more difficult clients.
Independent mortgage brokers can be categorised into two or three different groups. There is one group of very traditional mortgage brokers who have come through the banking sector for example, and have built up a very strong network amongst the real estate sector and a whole range of lenders. They will have a hard won Client List that generates new references and repeat business, and they will be satisfied with this business and their place in the market.
Another group of mortgage brokers will have come up through the banking sector and will be operating independently and finding it rather tough. This group will not be getting a lot of new business and through their website and will have to chase aggressively every lead that they get and also make absolutely certain that they provide good quality service so they can pick up referrals and any repeat business.
A third group of mortgage brokers have decided to go with the flow and join a large franchise, and while this costs them a lot of money in terms of a percentage of the commission. It also provides them with good steady new business and good ideas, tools and advice and contacts to enable them to do their business properly.