Need a home loan? Get a broker
12/02/2007 NST Rina De Silva

KUALA LUMPUR: Forty-five minutes and an Excel spreadsheet was all Gopi Kurup needed to decide among a bewildering array of housing loans.

A first-time home-buyer, Gopi knew he wanted a bank that allowed him to repay the loan earlier.

Over a cup of coffee with a consultant, he saw what 15 different banks had to offer through a presentation on a laptop.

The savings? "Tens of thousands of ringgit," said the 35-year-old, who works as a researcher.

Gopi’s consultant was JH Lok, a principal consultant with mortgage broking firm Emyght Networks.

A new breed, mortgage brokers are taking the difficulty and inconvenience out of shopping for loans.

Brokers compile different aspects of loans, such as instalments, interest rates and fees, terms, making it easier for clients to compare.

"Sometimes, they are surprised to find out that they could qualify for loans they thought they could not before," said Lok.

"We assess their risk appetite and tolerance level and recommend suitable loans they are comfortable with."

Banks pay them a commission of between 0.1 per cent and 0.32 per cent of the value of the loan taken, said Lok.

Clients like Gopi are growing in number as hectic lifestyles mean less free time to go from bank to bank.

That has meant a boom in Emyght Network’s business, which has grown through just word of mouth.

A year ago, the firm had five consultants. Today, it has 15, said Lok. Each can close an average of six deals a month, usually over two meetings.

Another firm, Mortgage Broker Sdn Bhd, has seen its business swell, too. The number of consultants it employs has grown 10-fold to 50, from five just three years ago when it first started up, said its marketing director Adrian Un.

The firm has sold RM800 million worth of housing loans in two years, and Un is confident it will reach RM1 billion this year.

Nine out of 10 of its consultants are ex-bank salesmen, who left for mortgage brokering where they got better commissions, he said.

Un himself used to head Hong Leong Bank’s mortgage sales centre from 1999 to 2004, where he had 25 sales staff.

Dealing with mortgage brokers make sense for banks, where typically, just one in five sales staff deliver.

"The rest (drive) up the bank’s cost," said Un.

Now, Un’s staff work around the clock servicing clients.

"In a way, we work more hours than working in the bank. But it is financially more rewarding," he said.

Mortgage brokers emerged from the many firms that sprang up after central bank Bank Negara Malaysia allowed banks to outsource the marketing of their loans.

Each firm serviced one client, selling that bank’s loans at property launches and in shopping malls. Now, though, firms like Mortgage Broker offer products of many, if not all, of the banks.

"We can offer more choices for the customers," said Un.

Eventually, mortgage brokers in Malaysia will probably replace bank sales personnel who market home loans as it has elsewhere, said Emyght Network’s Lok.

Un agreed, saying three of every five housing loans in Australia last year were done through mortgage brokers. And there, they receive commissions for every year their clients remain with the bank.

Still, this new sector has a long way to go.

Some would-be borrowers are like Rahayu Abdul Aziz, who prefers to do her own homework.

The corporate communications executive took six months to shop around for her home loan.

"I like seeing the bank (officers) myself, instead of a third party. I am afraid I will be cheated," she said.