Lending solutions for all

  • Why this successful broker focuses on property investors and referral partners

    He has settled more than $500m-worth of loans over the past ten years

  • Why this successful broker focuses on property investors and referral partners

    He has settled more than $500m-worth of loans over the past ten years

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    According to the latest Household, Income and Labour Dynamics in Australia (HILDA) survey, more than one in four Australian residents were born overseas. This diverse and changing society is why the banking and broker industries also need to be diverse.

    One lender continuing to adapt as the demographic across Australia changes is Pepper Money. Aaron Milburn, director of sales and distribution, says the “face of Australia is changing”, and he is part of that himself.

    “I was born in the mighty country of New Zealand, and I landed in Perth for the first time in 2008,” he says.

    “What’s more, the HILDA survey reveals that one in four couples in 2017 were ‘interethnic’, which means that spouses are born in different countries. I happen to fit into that category too!

    “I think that trends like these can only lead to a more vibrant Australian society.”

    In servicing Australia’s diverse population, Pepper has undertaken its own research to find out the types of customers who have traditionally taken out finance with the lender. It uncovered a cohort of firstgeneration Australians, or those who arrived in Australia since World War II.

    Migrants also make up a quarter of Pepper’s borrowers, and this is changing as the demographic of the population changes. The lender has seen a 54% yearon- year increase in the number of migrant borrowers.

    “Australia is experiencing its highest population growth rate since 1989, and more than half of that growth is attributed to overseas migration,” Milburn says.

    “For Pepper, nearly 30% of this group are self-employed, which points to why they are looking for the sort of flexible loan solutions that Pepper provides, like alt-doc loans."

    Knowing that it must cater for the diverse needs of the average Australian, Pepper is always looking to create new products. Just like those who were born in Australia, migrants have similar long-term financial priorities, such as owning their own home or buying an investment property.

    As Pepper offers flexible loan solutions to suit customers’ different lifestyles or working preferences, brokers know they can refer a range of different borrower types to the lender.

    Milburn says no matter where a borrower is from, they simply need guidance on navigating the current financial climate.

    “We believe it is the changing face of the average broker that is opening up opportunities for first-generation Australians to buy property” Aaron Milburn, Pepper

    Tools such as Pepper Product Selector and the 5-Step Process make it easier for brokers to position loans to suit these customers’ needs and help them address the emotions their customers might display during the transaction.

    Milburn says it’s also important that the broking industry is as culturally diverse as the group of Australians it serves.

    “We believe it is the changing face of the average broker that is opening up opportunities for first-generation Australians to buy property,” he adds.

    “These borrowers will often seek out a broker that understands them. One who identifies with their customs and lifestyle, and often speak their language. The broker can reassure and support them through what is a very stressful time, and help them to understand an often-complex market.”

    Milburn thinks the broker industry is doing well in terms of reflecting the diversity of Australian culture; the brokers who attended Pepper’s recent Insights Roadshow came from all manner of different cultures. However, the industry needs to keep moving, and Milburn says more could be done to support migrants with home loans.

    “Getting a home loan or even refinancing is one of the most stressful times in your life. While I think we’ve come a long way, there’s always more that can be done to support migrants looking to get a loan,” he says.

    “For example, brokers and lenders alike could look to support customers by employing people who speak different languages."

    One of the most important goals for those settling in Australia is to live in their own home, and Pepper finds that these borrowers are often open to alternative solutions.

    Education is a key part of a broker’s job with any borrower, but those customers who have come from elsewhere may require more support. Milburn says brokers should be prepared for it to take a bit longer to help their customers understand how the mortgage process works in Australia.

    “Speaking their language is not the only factor in connecting with ethnic communities. Taking the time to understand their culture and customs helps build rapport. If a broker can support them in their time of need, they may just become a solid advocate, and strong referral source,” Milburn says.

    Original Article