Mortgage brokers’ market share recently hit a record-high of 59.7%. I’m confident our market share will soon hit the 60s and even reach the 70s.
Why? It’s because mortgage brokers provide a better value proposition than lenders.
Remember, the only reason the mortgage broking industry was invented was because some lenders had been delivering below-average performance, and borrowers were hungry for an alternative.
Even though the banks have had more than 30 years to lift their game, brokers are still outperforming them in five key ways.
1. Brokers provide more choice
While a lender will only tell the borrower about its own products, most brokers will be able to compare and contrast loans from 20 to 40 different institutions. That’s why brokers are known for finding their clients higher-quality loan products at lower rates.
2. Brokers provide more knowledge
Being a mortgage broker forces you to acquire broad industry knowledge, because you’re working with 20 to 40 different lenders. When you work at a bank, you naturally focus on your own institution.
3. Brokers provide more support
Getting a loan can be a long, complicated process. When customers go directly to a lender for their loan, they have to assume the burden themselves. But when customer go to a broker, the broker holds their hand through the process.
4. Brokers provide more trust
When borrowers return to their bank for a new loan, they might have to deal with a different staffer, which would mean having to start the relationship from scratch. But when borrowers return to their broker for a new loan, they’re working with someone who already understands their personality, objectives and life situation. In any industry, when there’s more trust between professional and client, the professional can offer more informed advice.
5. Brokers provide more education
Banks, naturally, focus on providing loans. Brokers, though, are increasingly focusing on education and solutions rather than just arranging finance. Again, that leads to better long-term client outcomes.