Mobile lending versus mortgage broking

Are you currently working as a mobile lender? Maybe you want to become a mortgage broker but want to cut your teeth in mobile lending first.

It’s true that mobile lender salary can offer you a great base income but the key performance indicators (KPIs) and bonus performance benchmarks are challenging and there are many limitations that will impact your success.

How much do mobile lenders earn?

Salaries average between $70,000 and $95,000, sometimes higher for major banks and depending on your previous experience in loan processing or credit.

As part of your salary package you may also be given a company car, a laptop and a mobile phone for you to meet up with potential clients.

For mobile lenders that work in call centres specifically, pay can range between $70,000 and $80,000 and you’ll be equipped with a mobile and a laptop but usually no car.

On top of base pay, home lending specialists are also paid in bonuses for reaching certain targets over the year. Some banks call these commission but this is totally inaccurate.

Base salaries for mobile lenders tend to be higher than mortgage brokers, mainly because most brokers aren’t PAYG and work purely on commission.

This one difference means that mortgage brokers have the potential to earn more over the medium to long term. Typically, this means after 2-3 years of experience.

Of course, the base salaries for home finance managers isn’t anything to scoff at, particularly if you’re looking for more income stability in your career.

How does a mobile lender salary compare to mortgage broker commissions?

Despite not getting a base salary, the upfront and trail commission paid to mortgage brokers tends to be a lot higher relative to the bonuses paid to mobile lenders by their employer (the bank).

Based on a few major banks, upfront commission rates for brokers vary from 0.50% (+GST) to 0.7% (+GST).

For example, let’s say you settled a $1,000,000 home loan and we work off the average life of a loan which is 4 years.

For the first 4 years, you could earn $11,299 in upfront and trail commission combined.

Over the short term, getting paid upwards of $90,000 for a base salary as a mobile lender sounds lucrative. However, after the first 2-3 years of hard work, a broker’s salary will generally far outstrip that of a PAYG branch lender.

Read more about mortgage broker salary and commission rates.

Alternatively, if you think you’re the right fit to join our team of young professionals, send through your resume to careers@homeloanexperts.com.au.

You don’t get leads!

One of the big problems with being a mobile lender or a mortgage innovator is that you won’t be given free leads.

Instead, you’re expected to generate all of your own business in your local area. Building a book of clients from scratch is really tough.

Although it’s certainly true that you will be able to leverage the bank’s brand, you get no support with local marketing, which is actually what you really need.

The bank’s brand isn’t enough to bring in the business you need to reach the targets and other KPIs set by the bank.

Most mobile lenders rely on Facebook fan pages to build their network or they join community groups in their local area.

Without an online marketing and social media experience though, you can’t grow nearly as fast as a business with a team dedicated to generating new leads and nurturing those leads to convert.

At least with joining a mortgage brokerage, you can leverage their existing marketing and lead generation efforts to start building repeat business and referrals.

Home Loan Experts guarantees at least 50 plus leads per month which is unheard of for most mid-tier mortgage brokers. Some of the larger ones don’t even offer this!

The KPIs are seriously demanding

As mentioned previously, mobile lenders don’t receive commissions from the home loans they settle.

Instead, their bonuses are on their performance across different scorecard metrics including settlement volumes, cross-selling, conversations had with clients and their Net Promoter Score (NPS).

As of 2018, Westpac mobile lending managers were expected to:

• Complete 6 client interviews per week: Verbally though, the bank expects you to have 10 conversations per week.
• Complete 2 drawdown units per week: Actual dollar amount requirements vary depending your region so, for instance, Great Western Sydney would be $750,000 per drawdown while Sydney CBD would be $1.2 million per drawdown.
• Reach high settlement figures: One major bank requires its mobile lender to settle $3.5 million to $ million per month.
• Cross-sell four items per week: This includes credit cards, bank accounts, general insurance, wealth referrals, financial planning and everyday accounts.
• Maintain application quality: This is around 85% for first time submissions.
• Maintain your 80% NPS: They apparently survey settled clients every fortnight or 1 per month.

In order to receive a bonus, you need to hit at least 4 out of 5 of the above metrics.

Bonuses are assessed quarterly with Westpac but other lenders may scorecard you on a half yearly basis.

Other bonus KPIs for some other lenders include:

• 6 lodged applications per week.
• 2 general insurance quotes per week (general or home and contents).
• Around 15%-20% of your loans have to have Lenders Mortgage Insurance (LMI), hence, they prefer clients who are borrowing over 80% LVR.

What’s the work and life balance like?

Like mortgage brokers, mobile lenders are sometimes expected to work late into the evening or the weekend to meet with clients, develop referral partners and to complete application paperwork.

Working weekends is also a possibility but the PAYG contract that they have in place means mobile lenders aren’t paid overtime.

Again, many lenders don’t offer loan processing support so the workload is magnified.

Where mortgage brokers come out ahead is that after about 3 years of building a solid pipeline of repeat and referral business, there is certainly the opportunity to wind back your hours. It really depends on the life you want to build for yourself.

With mobile lending, you’re stuck working standard business hours.

Mobile lender training and mentoring

You may assume that what you’re giving up in commissions, leads and marketing, the bank is making up for by providing you with great training.

Yes and no.

Most lenders provide pretty extensive 6-8 week training programs in credit, sales and business planning.

Your area manager or business development manager (BDM) will also help you plan who your potential referrers are and where to actively get business.

Of course, you will still need to complete and pay for your RG146 (Tier 2 accreditation), which generally costs upwards of $400. This is required to give financial advice.

Where you’ll save some money is not needing to arrange membership with the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).

You don’t need to join an aggregator either for that matter.

Instead, ongoing training is provided through in-house webinars, teleconferences and credit seminars, generally speaking.

However, not having ongoing mentoring and guidance (requirement for both the MFAA and the FBAA) can really be the death knell for your mobile lending manager career.

Mortgage broker mentoring will allow you to get into really great time management habits and to help you meet your compliance requirements, just to name a couple of benefits.

Home Loan Experts supports continued professional development, offering resources, tools and guidance on a number of levels.

This includes one-on-one mentoring through our broker team manager, in-house trainer and Learning Management System (LMS).

You don’t get loan processing and admin support

One of the big costs of being a mortgage broker is home loan processing, IT and other administration support.

Although it may be true that you have access to the lender’s online application platform, where they consistently fail to provide support is through mortgage processing.

Rather than assessing an application, working with credit to get the deal approved and negotiating on a great price for your client, the majority of your time will be spent undertaking menial tasks that come with all mortgage applications.

This includes data entry, valuations, compliance and follow-ups, leaving you less time to source new business and touch base with existing clients who are in a position to refinance.

The latter is a much better use of your unique skills and expertise yet mobile lenders are expected to handle all stages of the home loan application, from initial interview, pre-approval, unconditional approval and all the way to settlement.

In contract, we have a support and loan processing officer assigned to each one of our brokers.

Once your client decides to proceed with one of your recommendations, support staff start the application process by asking for all relevant documents and keeping the borrower notified on the progress of their application.

They even liaise with conveyancers and builders to ensure all legal requirements are being fulfilled and progress payments are properly scheduled, respectively.

Want to spend more of your time providing actual solutions rather than handling admin tasks?

Send through your resume to careers@homeloanexperts.com.au to find out more.

Handling customer objections is a lot tougher as a branch lender

The fact is, customers are becoming more financially savvy when it comes to understanding how to achieve their long-term goals.

They’re also recognising the superior service that an experienced mortgage broker can provide over just walking into their local bank branch for a home loan.

Because of this, mobile lenders have to continually justify how they can provide their customers with the right home loan solution when they only have their bank’s products to choose from.

For vanilla applications, you’ll do fine, but for tough situations like unique properties, self-employed applicants or borrowers with adverse credit, you either won’t be able to fit them into the bank’s strict lending policy or you’ll have to continually get exceptions with credit.

On top of all of that, you can’t genuinely say that you were able to get them a competitive deal compared to the wide range of products available in the market.

Mortgage brokers, on the other hand, have a number of major banks, second-tier lenders and non-conforming specialists to choose from (we have a panel of nearly 40 lenders!).

Don’t mobile lenders get better pricing?

You would think so working for the bank approving the home loan but not necessarily!

Considering more customers are using mortgage brokers, brokers tend to get better interest rates than a mobile lender for the same home loan.

The reason is that, like our customers, if we’re not happy with the deal, we can simply take our business down the road.

Of course, this buying power works better for mortgage brokerages with a great track record of bringing in business that matches the bank’s lending policy. Home Loan Experts has a great record with a number of lenders.

Instead, mobile lenders can and will quote against other major banks to give customers the perception they’re getting a better deal. This only partly true and, again, savvy customers will see through this.

Do mobile lenders get faster turnaround times?

Yes, sometimes they do.

Formal approval may take a week for mortgage broker but mobile lenders and bankers may get turnaround in 2-3 days for the same application.

This is generally because they have a Designated Lending Authority (DLA) and can approve deals in-house rather than going through credit for formal assessment.

If they order a panel Automated Valuation Model (AVM) or kerbside/desktop valuation, the approval turnaround can drop to less than a day.

Of course, there are no guarantees for mobile lenders and if you aren’t able to handle a customers’ other objections on the solution and pricing you’ve offered, you will have already lost the business.

Does mobile lending operate on a franchise model?

With most banks you work for, you’re employed as a full-time PAYG lender in either their branch or their call centre.

Major banks Westpac, National Australia Bank (NAB) and Commonwealth Bank (CBA) have no upfront costs per say (other than your accreditation).

However, ANZ Mobile Lending operates as a franchise model in which you’ll need to “buy” into the business as an upfront cost.

With that, you’ll receive business planning, cash flow forecasting and set up, access and first-year cost of their application lodgement system.

You’ll need to contact one of their franchise reps to get the actual figures because it varies depending on your location.

Want to join our team as a mortgage broker?

A number of our senior mortgage brokers used to work as mobile lenders or in the credit departments of major banks and lenders.

Many decided to make the switch to broking because they were high achievers and didn’t want to be tied to one bank’s products.

They wanted to make a difference in the lives of everyday Australians and, at the same time, build the life they want with uncapped commissions.

If this sounds like you, we’re always looking to hire the right candidates.

Send through your resume to careers@homeloanexperts.com.au and we’ll be in touch.