By Eleanore D. Sanchez
Brokers are bridging the gap to home ownership as barriers to entering the property become more onerous, a South Australia-based non-bank lender observed in a recent report.
HomeStart Finance said that pressures from cost of living and lending obstacles are driving borrowers to secure the services of brokers to take out home mortgages.
The financing firm, which offers features such as lower deposits and shared appreciation loans, said brokers brought in 33% of its new loan business in 2015-2016, an increase compared to the 31% rate in the previous year.
Chief executive John Oliver said that the increase in broker-referred loans reflects the desire on the home buyers’ part to secure better financial services that suit their specific needs and address their requirements in an innovative manner.
Australian Prudential Regulation Authority (APRA) data validates the trend observed by the firm. Second-quarter results showed that residential home mortgages originating through the broker channel increased by 25% quarter on quarter. Further, APRA said that brokers brought in 48% of the total residential home loans in the same quarter compared to 46% in the first quarter.
“This result shows that increasing numbers of home buyers are going to a broker, rather than walking into a bank, clearly cementing the place of brokers in the Australian loan market,” Mr Oliver concluded.
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