I’d like to know this for many reasons.
Imput would be terrific, especially I we can get a brainstorming session going !
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MichaelMichael I am not sure if I understand your question. I am tired from lack of sleep.
Sorry.
Davo70Michael,
If you give us a few details about what you are considering I’m sure you will get some responses.
Ben.
Howdy,
If you rooly rooly want to be a broker then unfortunately the criteria is getting harder, but basically to become qualified you need to:
1. Have either two years credit experience or undertake a course (norm 2-3 weeks) approved by Mortgage Industry Association of Australia (MIAA),
2. Join MIAA which involves sitting some Uniform Consumer Credit Code (UCCC) and Privacy Act tests
3. Join a brokerage firm or Aggregator
4. Get Professional Indemnity Insurance
5. Get accreditation with upteen brokers, normally through your Aggregator’s network, which takes ages
6. Find victims, I mean property investing clients ….!!If, however, you just want all the info we broker folk claim to possess, how long have you got …?!?
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MelI guess I’m a bit confused on one issue, and that’s why do banks go through mortgage brokers who’s clients are the one’s that got a knock back from banks ?
The credit is still getting to the person asking for it, it’d just going through a medium !
why?[xx(]
MichaelIt’s all in the delivery philosophy. Banks do a tick/cross flick through applications looking for risk factors and hence reasons why NOT to lend the money. Brokers look at their clients circumstances and will bat on their clients behalf if needed with mitigating circumstances arguments that often help stack up just enough tick/cross points to get the person over the line.
It’s a game but everyone knows it, and it’s not ‘breaking the rules’. Banks are risk adverse and not keen to spend too much time thinking outside the square, brokers just give them enough info so they can continue not to think outside the square but pass loans anyway. Having said that I LOVE most of the major banks as they are predictable and generally very friendly and helpful, just contrained by their beloved bureaucracy, which after over 8 years in a PAYG J.O.B with a big multinational I thoroughly enjoy messing with …!!
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MelTar Muchly
AGAIN my learn ed friend, some paradigms I guess are just left for now !
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]Michael
As Heralsis stated :
One has got to become what one has to become in order to be what one is to become. I hope this helps!!Just be
Just be
[
]Or as Foistiuis IV stated : Be just.
I’m impressed
[8D]
Not easily impressed
Why would banks lend via a broker ?
I guess it is because business introduced by a broker is cheaper than having loan applications processed by their own staff.
If one bank refused broker introduced business they would miss out on that business with another bank only too glad to receive it.
Pisces133
Broker introduced loans account for about 30% of the market, expected to rise to about 70% as consumers realise what an advantage it gives them for shopping around and making the application process much less painful, so yep it’s a case of ‘the channel’s there so we better use it!’.
It’s also a very fast way for banks to get to a lot wider audience with special deals than normal ads because brokers will always try to put the latest best options forward, and if they are talking to 30% of the active borrower market every day, that’s effective (and free!) advertising, ie I think it works both ways.
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MelMichael,
Melanie is spot on so I won’t rehash what she has alredy outlined.
Its worth considering becomming a broker even if its just to service your own finance for the following reasons.
* The commission structure is pretty handsom
* Its part of your education anyway
* Its often not just a box ticking exercise as many brokers have access to low rates that the man on the street can only obtain via a broker
* Most loans have a brokerage allocated to the cost of the finance built into the loan conditions..you may as well take the fees for yourself.There will be some probity issues to deal with in submitting an application for yourself… but its worth considering.
Regards
Rob[8D]
It’s cheaper to use brokers’ services than employing staff to market loans for a bank. “Don’t come Monday” syndrome is always in the minds of the bank employees. As such, there is no good incentive to market loans for theie employer (bank). The employees do not get additional pay in terms of brokerage fees. Why should they work so hard for the bank?
The home based international business that I do works closely with Citibank on loans and credit cards. We just refer people to Citibank and Citibank will talk directly with the potential customers. In the event that the deal is successful, we will be rewarded.We also work closely with other corporations based on the same concept. If any one is keen to know more about this fantastic business, which can be done on part time basis, please email me on [email protected] and use PI as your email subject to differentiate your email from the spams.Melanie
Could you explain the commission that mortgage brokers earn? I have never had this properly disclosed to me before but have had a financial services company offer to split the comm. with me 50/50 if I took my refinancing business to them. They were saying that the comm. amounted to about $20000 over the term of the loan/s. Before that I was under the false impression (it seems) that brokers were paid a one-off fee upfront which was not too large?Hi!
How’s your day ?!? Just caught this trying to tear myself out of this addictive forum …. [
]Basically every broker is on a different wicket, depending on the company they work for, whether they are on retainer (salary) or commission only, franchise arrangements etc so I can only speak for my group. We operate as commission only and get an upfront commission of between 0.6 to 0.8% of normal loans, and roughly half that percentage of the outstanding balance each year as a trail commission until the loan is paid out, which happens roughly every four years. Non-conforming lenders pay a fair bit higher, but they are only a small part of your business, especially with the major lenders offering such great low doc loans now.
It’s great fun but I believe it’s not a walk in the park by any stretch – you have to be writing over $1M in loans per month every month for a decent wage and it’s really reward for effort based – ie it’s easy to starve if you’re not getting new business consistently, might you the feeling of satisfaction when you get someone into their dream house with a great deal is pretty infectious …. makes getting out of bed very easy!! [
]Remember, all brokers are different, but hope this gives a good guide.
Ciao,
Mel[
] Sorry forgot to answer the rest of the question – financial services companies often do offer to split brokering commission as they get bigger commissions from lobbing your funds into managed funds and the like, so it’s probably still viable for them. A lot of brokers also share commission with referrers that they get regular business from eg real estate agents, financial planners and the like, but rarely up to 50% from what I’ve seen. If they don’t get regular business from these sources you end up working for peanut pay so it’s not that sustainable.Other brokers’ views?
Mel
Thanks Mel
So in essence because of the trailing comm. every year, the broker comm. is costing the mortgagee somewhere in the order of $20000 (for loan of $200K) over the life of the loan excluding the cummulative interest effect of this money being paid along the way? And if a client goes directly to the bank the bank are earning an extra $20000 because they dont have to pay a broker an comm.?
That is quite a lot of money for anyone and especially for investors who have a number of IP’s!!! Seems that Michael is onto something here!!!Furthermore, if you have interest only loans, they effectively never terminate and one is thus paying 4% every year on the full loan amount for the rest of time to a broker for the mere pleasure of introducing your business to a lender. Sorry Mel-not having a go at you or brokers but just have a bit of a problem with a system which rewards people so well for years into the future (through trailing comm.) without the appropriate input which the commission would justify. It is the same in the insurance world.
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] Sorry forgot to answer the rest of the question – financial services companies often do offer to split brokering commission as they get bigger commissions from lobbing your funds into managed funds and the like, so it’s probably still viable for them. A lot of brokers also share commission with referrers that they get regular business from eg real estate agents, financial planners and the like, but rarely up to 50% from what I’ve seen. If they don’t get regular business from these sources you end up working for peanut pay so it’s not that sustainable.The topic ‘How does one become one’s own Mortgage Broker ?’ is closed to new replies.
