Joint venture launches new mortgage broking company

by Phil McCarroll09 Sep 2016
New South Wales' biggest new home builder has joined forces with a full service mortgage manager and broker company to launch a broking firm that will specialise in construction finance.

MyChoice Home Loans is the result of a joint business venture between McDonald Jones Homes and Mortgageport aimed at streamlining the process for those building their own home.

The joint venture followed extensive consumer research by McDonald Jones Homes which found that financing issues were a major cause for concern among people who are going the process of building their home.

According to the McDonald Jones research, a large proportion of people said their experience financing their new home started out straightforward, but led to unnecessary headaches during the construction phase.

“The move to investigate a mortgage solution followed a worrying trend that was raised where building starts were being impacted by finance delays, which was in turn impacting our customers,” McDonald Jones managing director, Andrew Helmers said

“We expect to build 3,000 new homes next year and this new service will make the entire building process easier for everyone involved, as the financer, customer and builder will all be working together towards one common goal,” Helmers said.

Glenn Spratt, managing director of Mortgageport, said the vision was for MyChoice to allow the finance and construction side of new home building to work harmoniously by specialising in construction finance.

“It specialises in that construction loan area. That tends to be a little bit more complicated than a normal loan and having somebody that specialises in that area is something that will really help consumers,” Spratt told Australian Broker.

“There’s a lot of paperwork in construction loans. The fact that MyChoice works inside McDonald Jones means that things like chasing up building contracts, variations, initialling authorities to start construction don’t have two or three people chasing them, there’s just one point of control,” he said.

Spratt said MyChoice would offer loans through Mortgageport’s aggregation agreement with FAST as well as Mortgageport’s own wholesale products and would hopefully eliminate the need to for borrowers to become de-facto project managers.

“What we’re trying to do is simplify the process and make things much easier for customers, particularly through our mortgage management arm and do away with a lot of the traditional paperwork,” he told Australian Broker.

“What our market research showed was that customers thought their loan was going to be ok and everything would be nice and simple and then partway through the construction process they realise they have to become the finance project manager.

“Doing things like chasing up banks for valuations and progress payments and what seemed easy upfront became a real headache. Buyers didn’t sign up for that and they want somebody to look after that for them.”

McDonald Jones Homes is also part of the MJH Group and Spratt said MyChoice would be rolled out to home builders in that group that operate outside of NSW.