With the unprecedented rise of artificial intelligence and other technology advancements, is human interaction set to be obsolete in the future of mortgage brokering?
What do brokers do?
Mortgage brokers are among the most important members of a property investor’s financial team. Aside from helping investors make sound financial decisions, mortgage brokers also assist banks by being an effective channel to connect them with clients who are looking to secure finance. While some banks have a direct channel, the fact that more than 53 per cent of mortgage loans are secured through brokers make these professionals indispensable.
However, many are starting to ask the question: For how long will mortgage brokers be relevant in the field of property investment? The past few years saw the rise of artificial intelligence and other remarkable innovations. Technology is definitely changing the landscape of the wealth-creation business.
Despite changes, the mortgage broker believes that the “human touch” will always have a place in the property market, especially considering the added complexity brought by new guidelines from administrative bodies such as the Australian Prudential Regulation Authority (APRA). Mortgage brokers, as well as other property professionals, will remain an integral part of the vast property investment landscape for years to come.
A growing industry
The APRA has recently altered guidelines on lending and interest rates in order to avoid having investment books grow too fast. The changes implemented not only widened the disparity between interest-only rate and principal interest rate but also added more variables to consider when securing finance, making it more complex for property investors.
Before, you had fixed and variable rates. Now, we’ve got fixed interest-only, fixed principal and interest, variable interest-only, variable principal and interest, investment interest-only—there’s so many variables. A rate is no longer a rate, and a product is no longer a product the way that the loans are assessed.
There’s so much more complexity and the added layer of complexities is just going to drive more and more people to mortgage brokers.
As compliance gets more complex, the share business to brokers and other property professionals gets better. The mortgage industry has grown up over the last decade and, although it’s most definitely going to be challenging for both investors and professionals, it will only continue to develop as time goes by.
A future together
While technology will certainly augment the processes in property investment, especially financial services, human interaction will remain. In fact, a lot of young investors nowadays prefer to have people involved in the process instead of completely relying on technology. After all, property investment is not a cheap venture, and investors want as much guidance and assurance as they could get.
It’s so important to have that personal connectivity when taking on mortgage debt … A lot of the heavy lifting might be able to get done by machines, but into the future, that relationship is still key. Investors want the confidence of an expert guiding them… because, sometimes, too much information creates confusion, and there’s a lot of information online..
Technology is definitely going to provide a lot of benefits for investors, but the education that one gets from a professional is what will ultimately add value to his portfolio.