- JNM wrote:Also to note that brokers not only get a trail commission for the life of the loan but they also get an upfront commission. Someone has calculated that on a $350,000 loan over 30 years, the broker gets over $13,000 in commission.
Extremely unlikely. Most loans are refinanced/paid out within a much shorter space of time. Also, in general, if a loan is refinanced/repaid within the first 18 months the lender will claw back some (if not all) of the brokers commission (something most people don’t realise).
JNM wrote:Apart from going directly to banks yourself or using a broker, there is a third option. You can hire a borrower’s agent, in the same way you can hire a buyer’s agent to purchase a property. They charge you a fixed fee (usually around $4000) and they then search for the best loan for your situation AND every month they refund you the monthly commission that would have gone to them.$4k upfront! I don’t think I need to say more. Yes, the rebated trail commission sounds enticing – but like Richard said, that’s going to take a long, long time to make up that initial $4k. Also, that diagram on the website is incorrect – the borrower doesn’t pay the brokers monthly trail.
JNM wrote:I think this is the kind of situation where the loan person is really impartially working for you to get you the best loan for your situation because they are getting paid by you. Mortgage brokers get paid by the banks, usually through their the aggregator they are working for, so they could be influenced to push one particular lender over another.This comment is an insulting generalisation. I don’t know of any broker that would suggest one product over another purely based on receiving more commission. Besides, if you looked at the commissions paid by lenders they don’t vary all that much (and if anything, they continue to be reduced). The ones that pay highest are the lenders dealing in the sub-prime space (impaired credit history, etc).
JNM wrote:If I can afford it, I’d rather hire a borrower’s agent myself. there are not many around but I think this model of doing loan business will increase in the future. A good one that I came across is based on the gold coast – check it out at http://www.vanillaloans.com.auPersonally, I can’t see it working. If it does – I’ll become a “borrowers agent” tomorrow – I could only dream of getting a $4k upfront commission for writing a $400k loan. I also wouldn’t have to worry about the $4k being clawed back within the first 18 months of the loan.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Totally agree… Most of loan will refinance within 3-5 years.. .hardly any upfront commision by the lenders and the trailing commision is based on the size of balance not initial amount
Hi 4jojo, It depends on your situation. If you are self employed and have a need for your application to be prettied up, I would suggest a broker. If its straight forward, it pays to shop around, especially if you don't have a relationship with a broker. I suggest shopping around and then sourcing your chosen lenders mobile banker. They are specialists in lending for their lender I'm not a broker, I'm a referrer. I connect people to their chosen lenders mobile banker, thus getting the best deal possible. In turn they pay me a finders fee, which i refund back 65% to the borrower. ($1000+) have a pay around on the refund calculator and make your own calculated decision
regards
Kane with only 6 lenders on your panel i dont believe you are getting clients the best deal possible.
Be interested to see how you get around NCPP with that kind of statement.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As someone above has just said that I dont think that going through broker is required if there is an easy application
– You are a PAYG
– You have liquidity
– You have enough other assets to increase the loan amount.thats it!
Although I will be interested to know how brokers can give the benefit in regards to giving commiission to borrower.
Then of course borrower has nothing to loose to go through borrower. But I am sure there is something hidden words in between.
Anyone?
techamitdev wrote:As someone above has just said that I dont think that going through broker is required if there is an easy application– You are a PAYG
– You have liquidity
– You have enough other assets to increase the loan amount.thats it!
Although I will be interested to know how brokers can give the benefit in regards to giving commiission to borrower.
Then of course borrower has nothing to loose to go through borrower. But I am sure there is something hidden words in between.
Anyone?
If all you want is a loan processor then likely thats all you'll get, there is a lot more that a good broker can give an investor. Personally, I charge a fee on top of keeping all the commission and i have a comparatively large practice with 4 brokers and an assistant. There are a lot of people, including quite a few who post on here that think my payment structure is value for money. I'm not sure if Richard charges a fee, but he could easily justify doing so also.
I strongly suggest anybody who is asking the question of whether to use a broker, have a look through the archives of this forum and you will see on display the depth of knowledge of some of the great brokers who do or have posted on here. The best way to save money is to have an optimum tax structure, interest rate and rebates pale into insignificance compared to this, to acheive this you need a good accountant, potentially a financial planner if super can be introduced into the structure (a must for anyone approachjing or over 55 years of age, or with an investment horizon that extends past this age) and a broker who knows enough to work effectively with these advisers. Most bankers, and most brokers for that mattert, don't have a clue about taxation or super.
Regards
AlistairI am not for nor against brokers…
Brokers I feel are tarnished a little with the same brush that affects real estate agents, car sales, finance and tax advisors etc.
I think the truth of the matter is that there are good ones and not so good ones (not unlike any other profession). There are people who are genuine, committed, educated and willing to work hard to get you the best deal possible and there are others that are tired or lazy or perhaps struggling with other issues in their life that may not care so much or work so hard for you. Some are inspired to do good and others are just trying to find a way to put bread on the table.
Herein lies the difference (IMO) a good broker will get you a better deal (whether that be structure, rates, future borrowing potential etc) an average broker will likely get you the same result you could get yourself. (not unlike a tax agent)
So therefore the question becomes how to you find a good one… I havent used anyone on this site yet but their commitment to the site and their willingness to share what they know demonstrates to me that they are not the average broker. I would think meeting with a few and asking them their thoughts and having them explain what they can do for you might give you a better indication as to whether that particular broker is good for you.
In my area I have not as yet found what I call a good broker (hopefully they are out there). I work direct with my bank manager by rely heavily on support of this site. A concern for me is that to my mind one of the good qualities of a quality broker is that they have good working relationships with the lenders, with that in mind I have to date been uncertain whether a broker outside of my area can better facilitate lending than one in my area? (sometimes the local branch manager has to go into bat against the corporate office in order to support lending in regional areas)…
My two cents..
Qlds007 wrote:Kane with only 6 lenders on your panel i dont believe you are getting clients the best deal possible.
Be interested to see how you get around NCPP with that kind of statement.
Cheers
Yours in Finance
Hi Richard
Thank you for your comment, I have all the major lenders on board with a further 4 2nd tiers coming in the next few weeks. The majors currently are doing over 70% of business in Australia. Saying that 60% is direct business and 40% is broker. I concentrate on the direct business and refer borrowers to the mobile banker of the lender they choose. I then refund 65% of my commission, in most cases $1000+ back to the borrower. It’s a new model , I have been testing for over a year now with great success. It’s only now that I’m taking the company nationally.
The customers who have come to my service, have been given great loan packages. With the ability to make the lenders compete against each other draws the best possible deal. Most customers choose 3 lenders to fight for their business.
In regards to the NCPP act, my solicitors are Gadens Lawyers who created the NCPP, so you can rest assured by agreements and business is 100$ ethical. Happy to drop her name if you need NCPP advice.
Really i didnt realise Gadens Solicitors created NCCP (I will assume you had a typing error in your response) i thought it was a Government legislation administered by ASIC.
Shows how wrong you can be.
Even with 10 lenders i still cant see how you can be offering a wide choice of lenders.
Wonder why we get so many calls and emails each week.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Really i didnt realise Gadens Solicitors created NCCP (I will assume you had a typing error in your response) i thought it was a Government legislation administered by ASIC.Shows how wrong you can be.
Even with 10 lenders i still cant see how you can be offering a wide choice of lenders.
Wonder why we get so many calls and emails each week.Cheers
Yours in Finance
Richard, You are right and wrong.
You must not have heard of Jon Denovan http://www.gadens.com.au/OurPeople-Detail.aspx?navid=3&cid=34&oid=1&pid=58
Richard, I find your comments to have no supporting evidence. Do you have a problem with my business?
10 lenders? By broker news, the average broker completes 2 deals per week and have 30 lenders via their aggregators. With 70% of business going to the majors, why do I need more than 10 lenders? 10 lenders alone will cover 85% of business.
Also via broker news, they show the average broker has trouble keeping up with the required business levels to keep their agreements open.
You being an elite broker, may not have this problem, but a lot do.Lay off with the bantering
As i said Gadens did not create NCCP with our without Jon.
You arrive and 5 minutes later you start advertising your wares.
Honestly mate give a little back to the community before you start flogging your services.
With a mass of 8 posts most members can see right through you.
Dont worry we have seen your sort come and go every week or two over the last 9 years.
And by the way have no issue with your business even if i do not believe in the concept or agree with you.
If you ever read API magazine you will see the reason i am involved in the Finance industry.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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