Mortgage Broker Fees

Its not that normal, but does happen depending on the situation. If he’s likely to be clawed back he may charge a fee for service (ie if your developing to sell in short periods).

Some brokers charge an upfront fee for service – I wouldn’t say it’s quite the norm (I don’t) but if it is going to be charge – it needs to be disclosed upfront.

Cheers

Jamie

I would have no issue with this – if the fee is disclosed up front. i.e a broker will send a fact find and as part of that may state a fixed fee of $500 per loan for instance.

Its amazing how many people dont know that brokers get paid by banks and even more amazing is the amount of brokers that donot disclose their commission.

I guess in the end, if you happy with the service then go ahead, if not get a second opinion.

Cheers Ivan

The quote and proposal is a good development as you will see what the broker receives from the lender and also their fees if any at the outset. Often the broker will discuss fees, commissions and clawback (the fact that the bank simply takes back the commission if the loan is discharged within certain time periods) as part of the initial conversations and then develop this more if the customer moves toward application. I don’t charge fees but in certain circumstances I think it is entirely reasonable if brokers do. Most of the brokers on this forum have property investment experience that is far outside the scope of the general broking population. Some brokers don’t invest and some don’t own homes and never have (true).

That does not mean they are not or could not be good or even great. Although, I doubt you would get the passion and experience that you need from a non investor. When it comes to fees I think it has to represent value to you. For example, Stuart has an invitation only brokerage and then others such as Terry have multiple qualifications while Richard has many years of investment experience (much of it in niche and complex areas) to marry with his service. With this type of person there will be service overlaps where the value you receive would will be far above the broking transaction itself (there are others on forum that offer other complimentary and additional skills as well so sorry to those I have not mentioned this time). A fee would be entirely reasonable when you are receiving this additional added value.

• This reply was modified 9 years, 9 months ago by  Don Nicolussi.

Tom of course that assumes the loan is a residential loan in a personal name otherwise NCCP does not apply.

A complicated deal could well be a Company loan or Development deal or similar.

Cheers

Yours in Finance

Terryw wrote:

When I remember to I tell potential clients that there is a fee of $550 if they don’t go ahead. I get many people who want to talk to me about structuring and sneak in free legal advice, when coming to me as a broker, and then sometimes I never hear from them again.

Terry no hard feelings mate – i’ll always talk to you – you’ll hear from me again.

CharlieX wrote:

moving to fee consultation seems like a great idea :)

If the industry moved to fee consult over commission system, net result would likely be a reduction in people using brokers services in favour of direct to branch.

This would result in a reduction in competition on rates and products.

CharlieX wrote:

how about say the minimum engagement fee be $1k, to reduce tire kickers wasting broker’s time?
for this engagement fee, the broker has to specify the services involved and provide the deliverables as set out in the agreement to the client within say five days.

Some brokers do charge an upfront fee that’s rebated upon them being paid a commission from a lender.

Cheers

Jamie