Mortgage Brokers dont just provide information on interest rates. They also provide information on the banks credit guidelines. You can have a look at websites to get an idea about products and pricing and then go see the lender/mortgage broker to see if your circumstances actually fit with that lender. If you decide a mortgage broker is for you, look at their experience and how long they have been a broker for. Also ask some friends if they can recommend anyone.
Is A Mortgage Broker Necessary?
- Thread starter Michael.Knight
- Start date
I love these forums...
It is worth noting that with volume requirements now in place, most individual brokers do not have access to all 4 major banks or many smaller banks e.g. ST George. As brokers offer a wide range of products they also don't understand the finer details of bank policy compared to some bankers that specialise in one banks proceedures and speak to their credit managers on a daily basis (and of course can actually approve loans).
Broker channels work like a production line with 1000s of applications per month going past credit managers. Although a broker has a wider option and choice of lenders, that cannot touch the production line - simply call their 1300 support number and ask a uni graduate who works on the production line to help with the deal.
A good broker is better than a bad banker.
A good banker is better than a bad broker.
Personally I'd go direct because a I am in the industry and understand the products. I also know all major banks can approve my deal on the spot so I would make sure the manager knows I am expecting them to process my application while I wait and have a coffee...
Same day approval or I go to the next major on the a
Street. 48 hours is longer than it actually takes.
It is worth noting that with volume requirements now in place, most individual brokers do not have access to all 4 major banks or many smaller banks e.g. ST George. As brokers offer a wide range of products they also don't understand the finer details of bank policy compared to some bankers that specialise in one banks proceedures and speak to their credit managers on a daily basis (and of course can actually approve loans).
Broker channels work like a production line with 1000s of applications per month going past credit managers. Although a broker has a wider option and choice of lenders, that cannot touch the production line - simply call their 1300 support number and ask a uni graduate who works on the production line to help with the deal.
A good broker is better than a bad banker.
A good banker is better than a bad broker.
Personally I'd go direct because a I am in the industry and understand the products. I also know all major banks can approve my deal on the spot so I would make sure the manager knows I am expecting them to process my application while I wait and have a coffee...
Same day approval or I go to the next major on the a
Street. 48 hours is longer than it actually takes.
There looks to be some biased opinions based on everyones profession
A broker is not necessary but in my "biased" opinion i believe they can add a lot of value. I used to have a branch manager of a bank send me applications to put through third party channel cause they would not get approved by his channel! Go figure but it used to be a lot of business cause his response at the time was his channel had a "risk" budget and third party had a "sales" budget and he rather keep the customer with the bank so he still gets the credit cards/insurance/transaction accounts.
A broker is not necessary but in my "biased" opinion i believe they can add a lot of value. I used to have a branch manager of a bank send me applications to put through third party channel cause they would not get approved by his channel! Go figure but it used to be a lot of business cause his response at the time was his channel had a "risk" budget and third party had a "sales" budget and he rather keep the customer with the bank so he still gets the credit cards/insurance/transaction accounts.
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See the post above mine from Kristine.
She has been contributing to this forum for a loooooooooong time and is well respected
ta
rolf
In terms of on the spot approval:- Anything that has residential security and meets servicing. If there is a policy breach - e.g. Unpaid Default over $500, Shortfall in servicing, Or bad conduct on accounts, the file needs to go to a credit manager. They usually come back the same day or at worst within 24 hours.
Some recent figures I saw from a major bank showed broker channels have 65-70% error rate with applications being "referred" back to the broker for more info, compared to 30-35% with direct chanel.
It does not matter if you are going direct or through a broker. The best way to know if they are good at their job is by monitoring how many times they come back for more info or asking questions after lodging the deal.
If your loan approval is taking a week to be approved, it is either going backwards and forward between broker and bank or banker and credit manager and is almost certainly due to not being submitting properly or not having sufficent comments.
Im not bagging brokers here.
I know brokers who are 'tier one' (high volume with low error rates) with Westpac, ANZ and CBA. They can all settle deals within a weekfor their top brokers - just like an experience banker can.
Some recent figures I saw from a major bank showed broker channels have 65-70% error rate with applications being "referred" back to the broker for more info, compared to 30-35% with direct chanel.
It does not matter if you are going direct or through a broker. The best way to know if they are good at their job is by monitoring how many times they come back for more info or asking questions after lodging the deal.
If your loan approval is taking a week to be approved, it is either going backwards and forward between broker and bank or banker and credit manager and is almost certainly due to not being submitting properly or not having sufficent comments.
Im not bagging brokers here.
I know brokers who are 'tier one' (high volume with low error rates) with Westpac, ANZ and CBA. They can all settle deals within a weekfor their top brokers - just like an experience banker can.
Dear VIC Lender
hahahahahahahahaha!!!
Oh, you crack me up!!
I haven't had such a good laugh in a long time.
Sorry, but you sound like an 18 year old Banking Cadet who has just sat through some training sessions and thinks that this is the way the world turns!
Lending is not like Cash Converters, or Cheque Express!
heheheheheh!!
As a really Old Timer I am so glad to see some fresh blood joining the Forum, especially with your great sense of humour!
When did you last submit a loan application with a servicing shortfall? And why did you do that?
I hope you stick around for a long time. Provided that you are willing to concede that you don't know 'everything' then you will learn a lot from this Forum.
I wake up each morning realising how little I know. That way I learn at least twenty new things every day.
For example, did you know that ANZ are currently not allocating files for assessment until Tuesday 21st December? No, neither did I until I rang them this afternoon asking after a file with a 'respond' date of yesterday. Do you know how many lenders are actually closing their assessment departments between Christmas and New Year? No, I haven't experienced this before this year. Makes sense for them, rather than struggle along understaffed for the next two months. However, I am chasing where to put a paid $311 default from March, 2010 and I cannot find anyone who is interested in this deal. Must be something to do with the postcode, or maybe that the customer has just changed status in his employment, or maybe what he ate for breakfast. But, just because he didn't get an approval while he had a cup of coffee, doesn't mean that there is not a deal out there for him - but it takes a Broker who doesn't know much to go and get that deal, not someone with an idealistic view of the world.
Anyway, welcome again, your absolute black and white approach is interesting and that's what discussion and debate is about, everyone sharing their experience (not just their pedantic opinions) and learning from each other.
The Somersoft Forum Bus has plenty of room and we just all shuffle along a bit and make some more room whenever anyone new joins in.
Happy Days
Kristine!
hahahahahahahahaha!!!
Oh, you crack me up!!
I haven't had such a good laugh in a long time.
Sorry, but you sound like an 18 year old Banking Cadet who has just sat through some training sessions and thinks that this is the way the world turns!
Lending is not like Cash Converters, or Cheque Express!
heheheheheh!!
As a really Old Timer I am so glad to see some fresh blood joining the Forum, especially with your great sense of humour!
When did you last submit a loan application with a servicing shortfall? And why did you do that?
I hope you stick around for a long time. Provided that you are willing to concede that you don't know 'everything' then you will learn a lot from this Forum.
I wake up each morning realising how little I know. That way I learn at least twenty new things every day.
For example, did you know that ANZ are currently not allocating files for assessment until Tuesday 21st December? No, neither did I until I rang them this afternoon asking after a file with a 'respond' date of yesterday. Do you know how many lenders are actually closing their assessment departments between Christmas and New Year? No, I haven't experienced this before this year. Makes sense for them, rather than struggle along understaffed for the next two months. However, I am chasing where to put a paid $311 default from March, 2010 and I cannot find anyone who is interested in this deal. Must be something to do with the postcode, or maybe that the customer has just changed status in his employment, or maybe what he ate for breakfast. But, just because he didn't get an approval while he had a cup of coffee, doesn't mean that there is not a deal out there for him - but it takes a Broker who doesn't know much to go and get that deal, not someone with an idealistic view of the world.
Anyway, welcome again, your absolute black and white approach is interesting and that's what discussion and debate is about, everyone sharing their experience (not just their pedantic opinions) and learning from each other.
The Somersoft Forum Bus has plenty of room and we just all shuffle along a bit and make some more room whenever anyone new joins in.
Happy Days
Kristine!
You have to put this in context Vic Lender cause recently we have seen a number of issues with a few lenders coming back asking clarification on a number of issues and all the issues are either covered in the notes or documentation that they do not look at. In my experience a lot of lenders have inexperienced staff handling files sometimes and becomes frustrating for us because it creates extra work and delays files when it is all covered up front.
Latest rumour i heard was that one of the majors has been given one last change on their auto LMI approval.
Forget your 3 strikes and out this is 1 more and send all your deals to us for the forseable future direct or broker chanel makes no odds.
Also another major wanted $1700 upfront valuation fee as they about to lay off all inhouse valuers and the panel valuer was not prepared to travel there for less. (We are not talking the back end of beyond either).
Kristine i feel your pain on placing your small default deal and am so glad that i am on holiday in the UK until Feb and not having to deal with the day to day Xmas issues this year.
Forget your 3 strikes and out this is 1 more and send all your deals to us for the forseable future direct or broker chanel makes no odds.
Also another major wanted $1700 upfront valuation fee as they about to lay off all inhouse valuers and the panel valuer was not prepared to travel there for less. (We are not talking the back end of beyond either).
Kristine i feel your pain on placing your small default deal and am so glad that i am on holiday in the UK until Feb and not having to deal with the day to day Xmas issues this year.
Hi Christine,
Thanks for the feedback. I've actually been in the industry almost 15 years ( I keep telling people 11 but I've being saying that for 3 years). Ive worked in commercial credit, retail credit, as a BDM and credit training manager. Have also been a broker and get round 80K p/a from my old trail.
Last night i took an application for $1m and approved unconditional on the spot. No valuation required. Doc will go out today after i can get around to preparing them.
The delays you are talking about relate to the lack of good lending options outside the banks (hense all the talk about reform and competition) which created a huge influx of broker deals going to banks in the past couple of years.
In my opinion: high error rates, large volumes and too many low quality brokers and of course Xmas are the cause of your problems. At the same time someone can still go to a major 4 branch and have their deal approved on the spot.
In terms of black and white - I also like a bit of grey which is why I've said;
A good broker is better than a bad banker
A good banker is better than a bad broker
Brokers have a far wider range of choice
Bankers have the speed to market and approval authority
This post was asking if a broker was required. Most people took the approach that it was all pros and no cons. Truth is there are pros and cons with both.
Broker channel aside - if you go to a major they can interview and process the deal at the same time - about 70% of deals don't need to go to credit.
P.s. Thanks for letting me stay on your bus- seems no one wants to sit next to me.
Vic you are just stirring most of the time. It's only a matter of time till you and other bank sales staff loose your ability to approve deals at the branch level, desktop vals will go too. Then we will see how quickly you can get an approval.
I am sure any experienced broker would also agree that lenders make far more errors per applications than brokers, I would think the ratio would be at least 7:1. As for the data you quoted flat out I just don't believe it. Something a bank calls an error is often due to them misinterripting the application and not reading notes. Sometimes I am amazed at their dullness.
Have a good Xmas all
I am sure any experienced broker would also agree that lenders make far more errors per applications than brokers, I would think the ratio would be at least 7:1. As for the data you quoted flat out I just don't believe it. Something a bank calls an error is often due to them misinterripting the application and not reading notes. Sometimes I am amazed at their dullness.
Have a good Xmas all
Viclender is just another staff member who has to report to superiors, probably twice a day to see if he has met targets (loan value dollar amounts, insurance, cross sell this, cross sell that even if customer doesn't need it etc etc).
The problem is VIClender, you've come to the wrong place to try and drum up business and are you that desperate anyway? If the banks and branches were so good as you say they are, why do you need to try and sell yourself on a forum? Wouldn't customers be flocking through your doors?
I remember a guy on here from St George trying to do the same thing not to long ago. He didn't last either.
Good luck in meeting your targets VIC lender
The problem is VIClender, you've come to the wrong place to try and drum up business and are you that desperate anyway? If the banks and branches were so good as you say they are, why do you need to try and sell yourself on a forum? Wouldn't customers be flocking through your doors?
I remember a guy on here from St George trying to do the same thing not to long ago. He didn't last either.
Good luck in meeting your targets VIC lender
Thought I should reply to a few...
I'm not trying to drum up business.
I've never given a number or put a signiture on my posts.
I've not replied to any private messages. Only reply in posts.
Thats the way a real forum should be! Open and Honest!
For future reference I am happy to promose never to promote myself on a forum. If I want to do that I will put an ad in the paper. Happy to say my time here is all give and no take therefore I'll only post my real opinion.
Lets not try to pretend it is all pros and no cons. Am I the only ones that thinks there are ups and downs to dealing direct or dealing with a broker?
I think the original post asked for both pros and cons. Not just pros, pros and pros with your signatures at the bottom...
If you are living with one eye open.
I actually think most bankers and most brokers are the wrong bankers and brokers. Hence both have ups and downs. The biggest con to boths sides is trying to find someone that is both competent and honest.
Agree 100%
Quoting myself here. Going back to what I am saying there are pros and cons. Not just pros, pros, pros. Lets give the original post some merit and actually give both pros and cons.
Dont mind if you all want to go the pro side. I am happy to outlines somes cons.
Hi Richard. I would only assume this is a Myth. When the LMI providers audit the banks. The loans out of LMI policy are not coverred. Therefore the bank is effectivly self insured.
Like other insurances many claims do not get paid. For example if the lender settles a deal for a non resident and that is outside of the insurers policy - the insuer will not pay the claim if the deal falls over in the future.
If the LMI providers had to assess even one of banks deals - the industry would come to a grinding halt - (the LMI providers dont have enought staff to take on a single majors processing.
Just thought I would quote myself again.
A bank will say banks are better. Brokers will say broker channels are better.
Neither are true. They both just want your business.
I'm not trying to drum up business.
I've never given a number or put a signiture on my posts.
I've not replied to any private messages. Only reply in posts.
Thats the way a real forum should be! Open and Honest!
For future reference I am happy to promose never to promote myself on a forum. If I want to do that I will put an ad in the paper. Happy to say my time here is all give and no take therefore I'll only post my real opinion.
Lets not try to pretend it is all pros and no cons. Am I the only ones that thinks there are ups and downs to dealing direct or dealing with a broker?
I think the original post asked for both pros and cons. Not just pros, pros and pros with your signatures at the bottom...
If you are living with one eye open.
I actually think most bankers and most brokers are the wrong bankers and brokers. Hence both have ups and downs. The biggest con to boths sides is trying to find someone that is both competent and honest.
Agree 100%
Quoting myself here. Going back to what I am saying there are pros and cons. Not just pros, pros, pros. Lets give the original post some merit and actually give both pros and cons.
Dont mind if you all want to go the pro side. I am happy to outlines somes cons.
Hi Richard. I would only assume this is a Myth. When the LMI providers audit the banks. The loans out of LMI policy are not coverred. Therefore the bank is effectivly self insured.
Like other insurances many claims do not get paid. For example if the lender settles a deal for a non resident and that is outside of the insurers policy - the insuer will not pay the claim if the deal falls over in the future.
If the LMI providers had to assess even one of banks deals - the industry would come to a grinding halt - (the LMI providers dont have enought staff to take on a single majors processing.
Just thought I would quote myself again.
A bank will say banks are better. Brokers will say broker channels are better.
Neither are true. They both just want your business.
Id qualify that a little further
A bank can only say its better within its policy framework. Simply comes down to perspective. One doesnt know what one doesnt know......... ( which also applies to some brokers im sure where experience or mentorship is replaced by Black box tech.)
So I say this.
There are some times where you will be better served using direct vs broker.
Just in the last week I had cause to provide direct lender details to 3 folks.
ta
rolf
I'm not blessed with enough insider info to know who's right and who's wrong. But I do know that we have a lot more brokers than lenders involved in the forum, and I'm interested to hear more from those involved in the lenders' side, so I'm disappointed when I see VIC Lender getting a "less than warm" welcome.
Having used a broker for the vast majority of my financing, but now having a direct relationship with a lender, I do agree that there are pros and cons of each. The deal I got direct from my lender was one which was at an LVR, which, when revealed to other lenders, and several very good and experienced brokers, made their jaws drop. I'm quite confident that there's absolutely no way that I could have gotten this deal anywhere else, and this lender doesn't use brokers, so there certainly can be circumstances where a direct relationship can be beneficial.
Having said that, if the deal had been less unusual, I'd still go via a broker first. One of the big advantages, other than their huge number of funding sources, is that I think you get better customer service. If there's a problem, when you're an individual, it's you as an individual against the huge machine. When you have a broker, the broker at least may have a whole bunch of business with that lender, and thus holds more sway than an individual would, when dealing with the lender. The brokers also have personal relationships with BDMs and other individuals within the lender which have proved useful to me on more than one occasion.
VIC Lender, thanks for continuing to contribute.
Having used a broker for the vast majority of my financing, but now having a direct relationship with a lender, I do agree that there are pros and cons of each. The deal I got direct from my lender was one which was at an LVR, which, when revealed to other lenders, and several very good and experienced brokers, made their jaws drop.
I'm quite confident that there's absolutely no way that I could have gotten this deal anywhere else, and this lender doesn't use brokers, so there certainly can be circumstances where a direct relationship can be beneficial.Having said that, if the deal had been less unusual, I'd still go via a broker first. One of the big advantages, other than their huge number of funding sources, is that I think you get better customer service. If there's a problem, when you're an individual, it's you as an individual against the huge machine. When you have a broker, the broker at least may have a whole bunch of business with that lender, and thus holds more sway than an individual would, when dealing with the lender. The brokers also have personal relationships with BDMs and other individuals within the lender which have proved useful to me on more than one occasion.
VIC Lender, thanks for continuing to contribute.
And what do you think the underlying reason for this is? Why is it Banks are closing the broker channel over xmas and yet CBA are advertising 60 minute approvals?
Why are assessors ignoring notes? why are we getting declines with no reason instead of calling to discuss the problem? Why is it for the last 8+ years there have been no problems with broker deals and now they all of a sudden require re-work??..... oh and BDM who are they? training sessions? policy update?. Does there really need to be policy changes on the daily basis we get now?
Why do we get requests for further information that's already been sent? Why do we need to re-order online valuations over and over.
Why are our Aggregators not DEMANDING SLA's from the banks and suspending them from the panel until they can start treating customer deals with respect.
How is it we can have a deal declined due to structure and the local branch of the client call and offer them the same deal?
You sound like you are having some troubles down there i SA I have seen an increase in rework from most lenders but only about 10 - 15% of deals.... it really gets down to who is picking up the file and the experience they have.
I have seen an increase in rework from most lenders but only about 10 - 15% of deals.... it really gets down to who is picking up the file and the experience they have.
Hey All
Agree on the points that good broker versus good bank v bad broker v bad bank.
Back to original question, yes a good broker is invaluable.
How to find a good broker? Well in my opinion:
The last point is critical.
I just refinanced with CBA Mortgage Innovations (in house CBA only brokers). Essentially they match the competition for high net worth clients – not the very best perfect rate but we have huge other business with CBA and dear wife will not consider a move unless essential.
We had 2 failed attempts with branch lender to get this done after being told servicing was an issue? Why? Didn’t under bus income etc… all of 20 something young and would not know an IP deal if it bit them on the a#@se.
So as a last resort before fighting wife, I went to CBA Innovations Bendigo. Used CBA Innovations in Sydney before so why not?
Long story short, servicing is now not an issue, in fact, how much do I need?
The difference is point 5.
And by the way on timing, check this out:
We talked phone early Dec. Seemed good.
So I sent spreadsheet (as previously sent to branch) on what we wanted, move to fix on three, increase to standalone on 4, pay done LOC, etc...two weeks before X mas.
He got back in 3 days saying all seems ok send docs.
Then Wife father dies so I do nothing.
He chases me so I sent docs Tuesday 21st 6pm in email. Valuation estimates, rental proof, etc. approval had to be struck before end Dec for special fixed rate. I have little hope.
10am Friday 24th – he calls, all approved subject to one valuation.
Yesterday 29th valuation by phone only. Broker calls that night - ready to go.
We are signing up on the 3rd Jan (coming to my house)
SOOOOO EASSSSY broker invaluable!!!
FYI Peter 14.7
Agree on the points that good broker versus good bank v bad broker v bad bank.
Back to original question, yes a good broker is invaluable.
How to find a good broker? Well in my opinion:
- Must be at least 30 years old.
- Ex Bank or Finance preferred.
- Must own IP/s.
- Must do most of the work
- Must understand business income versus PAYG
The last point is critical.
I just refinanced with CBA Mortgage Innovations (in house CBA only brokers). Essentially they match the competition for high net worth clients – not the very best perfect rate but we have huge other business with CBA and dear wife will not consider a move unless essential
. We had 2 failed attempts with branch lender to get this done after being told servicing was an issue? Why? Didn’t under bus income etc… all of 20 something young and would not know an IP deal if it bit them on the a#@se.
So as a last resort before fighting wife, I went to CBA Innovations Bendigo. Used CBA Innovations in Sydney before so why not?
Long story short, servicing is now not an issue, in fact, how much do I need?
The difference is point 5.
And by the way on timing, check this out:
We talked phone early Dec. Seemed good.
So I sent spreadsheet (as previously sent to branch) on what we wanted, move to fix on three, increase to standalone on 4, pay done LOC, etc...two weeks before X mas.
He got back in 3 days saying all seems ok send docs.
Then Wife father dies so I do nothing.
He chases me so I sent docs Tuesday 21st 6pm in email. Valuation estimates, rental proof, etc. approval had to be struck before end Dec for special fixed rate. I have little hope.
10am Friday 24th – he calls, all approved subject to one valuation.
Yesterday 29th valuation by phone only. Broker calls that night - ready to go.
We are signing up on the 3rd Jan (coming to my house)
SOOOOO EASSSSY broker invaluable!!!
FYI Peter 14.7