Despite occasional announcements that 2020 being cancelled, it just keeps rolling on. So too do the cycles of the real estate market. If you’ve been (understandably) following other events in the news, you may have missed the latest property market trends and predictions. We’ve had laws and rulings that may change the landscape of property investment forever. The plans of vulnerable young first home buyers have been dashed. But good things are still happening. Here’s why becoming a mortgage broker in 2020 is still a great choice.
To start with, the RBA decided at the start of June to keep the cash rate at 0.25%[i]. The banks have kept their rates the same too. Experts generally agree that the rate will be kept the same next month[ii]. What this means for the average home buyer is that the budgets they were working with before the end of the world March still apply. In other words, if they’ve still got the same incomes, they can probably qualify for the same size loan, as long as their preferred lender’s other conditions haven’t changed.
What might change is the type of property that can be bought for the same amount of money, and the bank valuations of properties.
According to the analysts at Corelogic, Australian home values fell in May[iii]. The national average was down 0.4%, with capital cities down an average of 0.5%. Since the start of June, auction clearance rates – the percentage of properties that sell at auction – have been down[iv]. More people are selling their properties than ever; up to the end of May, new listings were up 22.4%[v]. The good news is that there’s plenty of interest in the properties that are coming on the market; there seem to be enough buyers to meet the extra demand. Other property market commentators are positive too. They see things like stamp duty reforms and industry incentives as making it more attractive to buy property, both homes and investments[vi].
Where do mortgage brokers fit in?
In 2020 and 2021, mortgage brokers will have an important role in the volume of transactions that will happen. As banks respond differently to political and economic conditions, it may be more important than ever for buyers to have a professional on their side whose job it is to understand the changes and look out for their best interests. Mortgage brokers also frequently handle a lot of the paperwork and running around that can be very stressful and time-consuming for applicants. The convenience and peace of mind of a good broking service may be more appealing than ever.
Mortgage brokers will also play a part in securing better deals for clients who are struggling with financial stress. A significant part of any broker’s business is re-mortgaging and finding better deals for clients whose financial circumstances have changed. It’s also worth noting that many mortgage brokers are especially well adapted to the different working conditions we’re all dealing with at the moment. For example, many brokers already worked on a mobile or remote basis to serve clients’ needs for flexibility.
What is the mortgage broker job market like right now?
According to government projections, opportunities for finance brokers are set to grow by 8.5% in the five years up to May 2024[vii]. Thousands of new positions will become available. A lot of these jobs will be in metro areas, but there will also be many in regional areas[viii]. In fact, the growth rate in some regional areas will be higher than in some capital cities.
The more recent COVID-19 survey results are a little less optimistic, but there’s still some good news. Employers in the ‘professional, scientific and technical services’ group (where mortgage brokers fit) have been less impacted than other groups, and are more confident about the stability of future staffing levels[ix].
At the time of writing, there were 370 job ads for mortgage brokers on Seek[x]. There were also several assistant jobs, including many with on-target earnings over $100,000[xi]. Other related positions include administration staff for mortgage broking firms.
What is the pathway to becoming a mortgage broker?
Speaking of related positions, many mortgage brokers in Australia today began their careers as assistants or administrators. There are no official qualifications needed to become an administrator, although most brokers hiring administrators look for good customer service and organisation skills. It is common for support staff to study for their finance and mortgage broking qualification while working in a firm.
To become a mortgage broker, the minimum qualification is a Certificate IV in Finance and Mortgage Broking. This course introduces new professionals to the legal, technical and business basics of being a mortgage broker. Depending on the organisation you’re working for, you can generally start working as a mortgage broker with this qualification. However, the industry standard is a Diploma of Finance and Mortgage Broking. Completing a Diploma is a great way for new mortgage brokers, or prospective employees, to show their commitment to the profession. The Diploma level qualification builds on the Certificate IV, with further detail on different types of transactions, complex client situations, and more. It also contains important content on practice management; how to be in charge of a mortgage broking firm.
Most mortgage brokers work as authorised representatives of licensed organisations. However, some go on to open their own independent firms. To do this, they need to get a credit license. The minimum qualification for a responsible manager to get a license is the Certificate IV plus at least two years’ ‘problem-free’ experience[xii].
Flexible study options more important than ever
It’s fairly clear that the opportunities to become a mortgage broker are still there – and growing. What’s more important these days is the pathway you take to get there. Studying on campus is less appealing for those looking to minimise their health risk and fit study around their work commitments. Online study may also be more attractive for those whose schedules are up in the air due to changing rules around school attendance and recreational activities.
When you’re considering online study, you want a registered training organisation that’s specifically run online – not just temporarily adapted. At Monarch Institute, trainers are well-versed in supporting students to study remotely. They’re always available to respond to queries by email, phone, Zoom or Facebook during business hours, with quick turnaround on support requests and assignment marking. The learning material is made for online delivery, and there are online support systems including student Facebook groups for you to access as much or as little as you need. If you’re an independent learner looking for a flexible pathway to a career as a mortgage broker, Monarch Institute’s courses could be for you. Check out your options and chat to a course consultant now on 1300 738 955.