Can anyone shed light on this?
and someone told me before that it's not a once-off commission…mortgage brokers get paid more than once—is this true?Thanks
AOIt depends on the lender, and the broker – BUT PLEASE remember that if the broker does not get this, the bank does. So don't be too hard on the guys……… Work out your lenders interest for a few months and you will see where the money comes from…..
A franchised broker would likely make between 0.2 and 0.44 % of the deal – an 'independant' one anything from 0.66 to 0.8 .at the highest end. ( so in your scenarion, between $2200 &$ $4000) The brokers that encourage you to buy one of their 'own brand ' loans, which are essentially 'wholesale loans' with whatever margin they please added on and given a fancy name make a truck load though, with the 'bank said no' type 'brokers' making a ton this way…….- generally I suggest running a mile from these. And yes, a small trail commission is paid monthly on their 'loan book'. Fair enough the trail for sure. So, while it may sound a lot (it is in some cases) bear in mind a broker gets nothing for no deal, and also if they are fair dinkum have to pay staff, and premises, as well as all those 'community sponsorships' that seem part of having a retail premises, and as mentioned, the bank gets it otherwise…….SO……. make sure you make the broker earn their money, with plenty of questions, and do not hesitate to ask for help. A sidepoint…….. if you don't get paid unless you get the loan, you can imagine it is in the brokers interests to work hard to make sure your deal goes through is'nt it? Hope that helps. Cheers
Just to add to V8's comment the other thing you need to bear in mind is the clawback period.
With some lenders the entire amount of the commission received by your broker can be clawed back if you repay your loan within the first 18 months.
Some lenders phase the commission period in from Month 1 to 18 months others take back the lot.
Not sure of too many other professions where you get paid but could loose the lot 17 months later.
Richard Taylor | Australia's leading private lender
Trail commissions are lost on refinancing too!
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