In the mortgage broker industry, aggregators function as a kind of lead funnel, reducing the risk associated with secured investments for brokers. Aggregators also provide mortgage brokers with a plethora of business tools and marketing collateral to help them thrive.
However, what does that entail in real life?
The key to success for mortgage brokers is volume. You will receive more commissions the more loan applications you complete. However, many small businesses—especially those brokers just starting in the industry—may find it overwhelming and too expensive to try to manage a huge volume of loans. But before you even go that far, you’ll need to locate the leads necessary to build a sizable customer and commission portfolio.
This is the role of aggregators. Aggregators, sometimes referred to as mortgage dealer groups or mortgage franchise groups, are licensed loan-writing companies that give brokers access to a pool of lenders and securitized mortgage choices. Because of the amount of loans they originate, they can negotiate higher commission arrangements and absorb a significant portion of the early administrative expenses of loan origination.
Are you considering becoming a mortgage broker but are unsure of where to begin? Or are you an experienced professional seeking to change to better support? Regardless of your circumstances, the secret to success is selecting the ideal mortgage aggregator for your business.
But what precisely is an aggregator in the context of mortgage broking, and why do brokers and lenders need each other so much?
Let’s find out.
Understanding Mortgage Broking
In mortgage broking, one plays the role of middleman between lenders and borrowers. A broker searches for suitable loan choices, assesses the borrower’s financial status, and helps the customer with the application and settlement procedures.
Aggregators assist in addressing the difficulties that mortgage brokers frequently face, such as gaining access to a variety of loan products and staying current with lending regulations.
The Role Of An Aggregator
A mortgage aggregator serves as a platform or network that connects different lenders and mortgage brokers.
In addition to increasing the range of loan products that brokers may choose from, this arrangement gives brokers access to crucial resources and assistance, improving their capacity to successfully assist customers.
Great customer service, a wide range of lender panels, competitive compensation structures, and state-of-the-art mortgage broker software are all features found in the top mortgage broker aggregators.
Access To A Wide Range Of Lenders
Brokers can access a wide variety of lenders and lending products, including those from large banks, by working with an aggregator and non-banking lenders.
This range is essential for meeting the various wants and circumstances of clients, ranging from standard mortgages to more speciality loan kinds.
Support & Tools For Brokers
Aggregators provide essential tools and support services in addition to connecting brokers and lenders. These include help with compliance, training, and cutting-edge software programs intended to improve customer happiness and broker efficiency by streamlining the loan application process.
Streamlining the Application Process
Aggregators play a crucial role in streamlining the loan application process by utilising cutting-edge technology and effective procedures. Brokers may submit applications more successfully thanks to this streamlining, which also reduces paperwork and speeds up client approvals.
Attributes Of The Right Aggregator
Choosing an ideal aggregator may have a big influence on mortgage brokers’ businesses. The aggregator’s price schedule, the size of their lender panel, and the level of assistance and education provided are all important factors to take into account.
Fee Structures & Costs
It’s important to comprehend the pricing schedule of an aggregator. These costs might differ greatly and have an immediate impact on a broker’s profit margin. Brokers must balance the expenses with the advantages that the aggregator offers, such as access to a large pool of lenders and support services.
Lender Panel & Product Range
The lender panel of an aggregator must be both large and diverse. Brokers can assist customers with a variety of requirements and preferences thanks to a large lender panel, which offers a wide array of products. For example, niche lending solutions might set you apart when it comes to meeting certain client needs.
Support & Training Offered
For brokers, the degree of assistance and education offered by an aggregator may be revolutionary. A broker may better service customers and expand their business with access to technological tools, ongoing education, and compliance assistance.
How To Choose The Best Mortgage Aggregator?
A degree of training is necessary if you want to work as a mortgage broker. Mortgage brokers must have at least two years of relevant, problem-free experience to be eligible for an Australian credit licence, according to ASIC. Comparably, to become a member of the MFAA, a candidate must first complete training under an MFAA mentor and then demonstrate two years of experience in mortgage or finance broking. Because of this, before becoming members of the MFAA or obtaining their credit licence, new mortgage brokers must spend the first two years of their careers working as credit representatives of credit licence holders.
Broker aggregators are useful in this situation. The finest aggregators understand that new mortgage brokers require mentoring when they first enter the market, which is why they offer training and mentoring in addition to company growth necessities like leads, lenders, industry software, marketing, and compliance assistance. Certain aggregators go one step further and make significant investments in their brokers’ professional growth using platforms, webinars, seminars, and networking events held around Australia.
To select the ideal mortgage aggregator for your company, take into account the following factors before choosing your mortgage broking aggregator:
Consider their lenders:
Is larger always preferable? That might be oversimplifying the situation. As a mortgage broker, think about your speciality. To whom do you want to add value? You should search for bank and non-bank lenders whose products best suit your clientele based on the response you receive.
Charges:
Since each aggregator has a unique price schedule, it is essential to do your homework. There are three types of costs to watch out for: commission splits, where you divide your commission with the aggregator, one-time expenses like joining fees, and continuous fees like monthly fees. Similar to lender panels, different models are appropriate for certain brokers.
Membership:
Selecting aggregators that are members of the MFAA is a good idea because membership is frequently required to be approved by lenders. All of the mortgage aggregators on our list are MFAA members.
Marketing:
A limited number of aggregators include engineers, while others have designers and an internal staff of marketers that help with communication. Consider where you want to advertise your mortgage broker firm and what kind of support you can get in creating a marketing strategy.
What is the difference between a mortgage aggregator, a franchise group, and a dealer group?
When searching for a mortgage aggregator, additional phrases like franchise group or dealer group may come up. These broker organisations all operate in essentially the same way. Since they combine loan volume through a network of brokers, they are collectively referred to as “aggregators.” Franchise organisations function as aggregators as well; however, they do it through mortgage brokers who represent the franchise. Among Australia’s largest franchise groups include Loan Market, Aussie, Mortgage Choice, and Smartline.
Australian Mortgage Aggregator’s List
While there are many broker aggregators in the market, to get you started, you may refer to our list of suggested mortgage aggregators that are recognised by the MFAA below.
AFG: Known as the Australian Financial Group, this publicly traded aggregator resolved 34 billion dollars worth of home loans in FY2020, making it a true behemoth.
Astute: Since its inception in 2000, Astute has established itself as a highly renowned financial services provider, with a membership base of roughly 500 finance, insurance, and financial planning experts across Australia.
Finsure: Finsure, a more recent aggregator that debuted in 2011, takes great satisfaction in having the best CRM platform in the business.
Connective: Founded in 2003, Connective takes great satisfaction in providing its brokers with autonomy and assistance.
Aussie Home Loan: One of Australia’s most well-known aggregators, CBA-owned Aussie Home Loans, has renamed itself as simply “Aussie.” In FY2020, it settled 17 billion dollars worth of loans.
How mortgage aggregators in Australia are changing the sector?
Mortgage aggregators in Australia have transformed the mortgage business by changing the relationship between lenders and brokers. These mortgage aggregators have emerged as effective mediators, giving brokers tremendous influence and bargaining power when dealing with lenders. Despite their worries, broker channels have become an important part of banks’ overall efforts to acquire new loans.
In the past, banks may have depended heavily on their branch networks to produce new loans. However, with the development of mortgage aggregators, brokers have emerged as a strong force in the business. Aggregators provide brokers with access to a diverse panel of lenders, including both traditional and non-bank lenders, resulting in a competitive market in which brokers may negotiate better terms and rates on behalf of their customers.
This shift in power dynamics has forced banks to recognise the importance and significance of broker channels. While banks may not have first welcomed this transition, they have realised that collaborating with mortgage aggregators and working closely with brokers is critical to their continuing growth and success. Banks that actively engage with brokers may leverage their huge networks, knowledge, and client relationships to acquire new loans and increase their market share.
The rise of mortgage aggregators and the rising importance of broker channels have encouraged banks to improve their broker-focused tactics. They now devote greater efforts to assisting brokers, providing personalised goods and services, and developing efficient loan processing technologies designed exclusively for the broker channel. This proactive strategy ensures that brokers are equipped with the tools and resources they need to provide great service to customers.
Epilogue
In the professional world of mortgage broking, selecting the correct mortgage aggregator is critical for brokers who want to expand their business and improve customer satisfaction. Aggregators act as vital intermediates, connecting brokers with a vast network of lenders and offering access to a diversified selection of loan products. The finest aggregators provide wide lender panels, strong support services, competitive pricing structures, and professional development possibilities. These capabilities allow brokers to successfully handle client applications and expand their businesses. When choosing an aggregator, brokers should examine the lender panel’s comprehensiveness, the cost-effectiveness of the fee structure, the quality of assistance and training given, and the aggregator’s industry accreditations.
Are you prepared to discover the ideal fit for your mortgage broking company?
To find out how Proowrx’s extensive support services and industry knowledge may assist you in realising your company objectives, schedule a discovery call with us right now. Proowrx might be a beneficial ally in your endeavours.