Targeting “underserved” first home buyers

by Madison Utley09 Aug 2019

Brokers have been presented with a “brilliant opportunity” to tap into the “underserved” first home buyer (FHB) market, according to a specialist lending executive with over 30 years in the finance and insurance space.

“It’s been a long time since I have seen such favourable conditions for people looking to buy their first home,” said John Mohnacheff, group sales manager at Liberty Financial.

“Not only are interest rates the lowest we’ve ever seen, but housing prices have slowed and there is less competition in the market.”

“Despite these excellent conditions, the FHB market remains underserved. This presents a brilliant opportunity for brokers to get out there and promote the fact that they’re here to help them through the whole process.”

However, brokers looking to meet FHB demand must clearly communicate the breadth of the services they provide to clearly set themselves apart from the experience of going directly through a lender.

“If you want to play in this space, it’s important to highlight that you can identify eligibility for grants, offer support with property insurance and explain loan protection. It’s your job to make sure customers understand all of the other ways that you add value,” said Mohnacheff.

“If you’re sitting in your office passively waiting for business to walk in, you’re going to generate nothing.”

“The best thing a broker can do is promote the fact they provide choice. It’s not just about the lowest rate, it’s about the most optimal home loan. There are other things a first home buyer may want - to borrow a little more, a different structure, or help in working out which grant is best. It’s up to the broker to understand what the buyer wants and help them develop a strategy.”

Brokers are also equipped to encourage potential market entrants who fear they may not be well-positioned to secure financing.

Mohnacheff explained, “Liberty has always offered out-of-the-box, free-thinking solutions. We’ve always championed the fact that there are many ways to help people get into the market.”

“Many first home buyers may not realise that with custom lenders like Liberty, those with credit blemishes, low deposits or gifted deposits have options. Knowing this information may help them to get in the market sooner than they expect.”

Liberty not only provides personalised solutions for borrowers, but makes sure to support brokers in distributing its offerings through a variety of tools and systems.

“Brokers have direct access to our underwriting teams to help them structure the deal. And, tech features like Liberty IQ help brokers stay in touch with customers and offer round-the-clock updates on the status of their application,” said Mohnacheff.