How are the commisions earned by a Mortgage Broker standardised or regulated to ensure that they don’t become biased toward certain lending organisations?
They’re not.
However, most lenders offer the same commission rates. It is only the smaller non bank lenders that offer more.
Terryw
Discover Home Loans
Parramatta
[email protected]
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry,
I am only new at this. Is it easy to get this information from the lenders? I guess a lot of people don’t need to bother once they have established a relationship with a broker.
Chrisitnep
Lenders won’t give out this sort of information. It is on the broker web sites, or on the aggregation for broker members.
as a guide the average bank pays 0.70% of the loan amount as an upfront commission. But some of the small ones pay up to 2%!
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Christine,
You are quite welcome to ask your broker what commission they are paid by various lenders. As Terry says all of the standard lender’s charge roughly the same, it would be 0.6-0.7% upfront and 0.25-0.3% trailing commission. No decent broker would take commissions into account when recommending products, although I have just refinanced a client who was wrongly put into a high commission paying non conforming lender by his previous broker, and as a result was paying around $15,000 a year too much in interest. So it is prudent to ask the question.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044I always give my clients a copy of my commission schedule for the various lenders as part of my finance broking agreement that I get the client to sign. – i am sure some brokers may be influenced by commission but generally they are all AROUND the same except for non-conforming loans.
Anita Marshall
Advanced Finance Solutions
http://www.advancefinance.com.au
[email protected]Good question Chrisitnep,
I also provide my clients with commission disclosure from my panel of lenders…however in most cases they never seem to take much notice of it.
More importantly the question you should ask the Broker is “why have you recommended this lender/product over all the other lending institutions and how is it suited to my needsâ€Also, don’t be afraid to ask how many lenders they have on their panel, and is he or she a member of a professional body e.g., MIAA (Mortgage Industry Association of Australia) Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Wow, thanks for all the tips guys.
So basically, a good broker will be happy to disclose this information which will generally demonstrate farely standard rates. There is a professional association which is not a regulatory body but promotes ethical practices within the industry. A broker who is a member of such an association is likely to be conscious of his/her proffessionalism and the better brokers will of course have undertaken significant due diligence (number of lenders approached and depth of product research) in assessing an individual’s needs.
I feel a bit more ready to work with a broker now.
Boy, I really like this forum idea!
Thanks again everybody.I think if you choose your broker carefully you will be really pleased with the experience. They will help you choose from a selection of lenders and you will be amazed at the different ways you can structure a loan. Most brokers have a computer program where you can compare the different lenders using a comparison tool. Very helpful in deciding on a lender for your loan.
Anita Marshall
Advanced Finance Solutions
http://www.advancefinance.com.au
[email protected]
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