Advice wanted on mortgage brokers/financial planners

[newby]

Looking to purchase 1st IP and have had initial discussions with broker who charges a % of purchase price. I note from the websites of some brokers that they don't charge a fee as they get a commission from the lender themselves (although they claim to deal with many lenders).

Any views on which path to take (I'm assuming that all have similar expertise and solutions to individual circumstances).

Also any comments on mortgage brokers/financial planners in the ACT would be appreciated.

 

[geoffw]

For mortgage brokers in the ACT, you can't go past forumite Mr ED (ed Nixon)- http://www.loansapproved.com.au/

Financial Planners- Steve Navra. He's not based in the ACT any more, but does come here regularly.

 

[Steve KKK]

When dealing with residential loans, you will find that the majority of Finance Brokers (99.9%) receive their commission direct from the lender and therefore offer their services at no charge to the client.

They may charge a brokerage fee for commercial loans or leasing deals as lenders usually do not offer a set commission for these products.

Most Brokers should have access to a large number of lenders which in turn enables them to shop around for the loan that will best suit your individual circumstances.

 

[Jamie]

Looking to purchase 1st IP and have had initial discussions with broker who charges a % of purchase price. I note from the websites of some brokers that they don't charge a fee as they get a commission from the lender themselves (although they claim to deal with many lenders).

Any views on which path to take (I'm assuming that all have similar expertise and solutions to individual circumstances).

Also any comments on mortgage brokers/financial planners in the ACT would be appreciated.

Hi newby,

Which broker did you use that charges a % of purchase price?

Thanks,

Jamie.

 

[Rolf Schaefer]

Newby,
there is absolutely no reason for a broker to charge fees for a standard residential loan. It is a bit different for commercial loans.

Ed Nixon (AKA Mr Ed) is a valued member of this forum and has been contributing for a couple of years. He is located in Canberra and you can contact him on 1300 657 135.

Well informed sources tell me that he also has got a Diploma in Financial Planning.

 

[silene101]

Hi newby,

Like rolf said - no reason to pay the broker.

Be careful - the broker you mentioned may be charging a fee from you as well as receiving a commission from the bank once the deals in place.

I always like to ask how many lenders are on their books; at least 25-30 is a good number for a wider choice.

Since I started using a broker I haven't looked back; if he gets a good deal for me I want him to do all right out of it too, he's got a business to run.

 

[newby]

The Company is called Easyplan Financial Services

 

[pfsfinance]

Stay away from Easyplan. They are part of a marketing company and normally charge 1% brokerage fee. The larger company they were a part of went under owing around $1.8mil.

Find yourself another broker quick smart.

If you want any more info feel free to email me.

 

[Rolf Latham]

Hiya Newby

While most brokers do not charge an add on fee, Im not sure as to what the people you are talking to are offering you.

There may be something there that is worth the 1%. Generally my experience says no.

From comments made by other members above Id be concerned if you are sourcing your IP in the same way.

You said that .............I'm assuming that all have similar expertise and solutions to individual circumstances. Quite likely not true - you will find many different ways to achieve the same thingbut the wrong way could be v painful - look for the referrals and good words of existing clients and colleagues that have no financial gain - that referral you can normally trust - a few have been given here.

ta
rolf

 

[pfsfinance]

You'll get nothing for the 1%. Find yourself a broker that doesn't charge.

 

[Rolf Latham]

Hiya Newby

I would suggest that maybe a search of the MIAA membership would also help.

http://www.miaa.com.au/miaacontent/miaaMemberSearch.prMain

I am not aware of any MIAA members that charge fees where they receive normal commissions.

ta

rolf

 

[newby]

Thanks Rolf and all others who have contributed - certainly has given us food for thought and we will be looking into the alternatives put forward here. This forum is fantastic - so glad we signed up to it.

 

[T.M.A.]

Steve KKK,

Just wondering where you are licensed to be a finance broker?

You are based in the ACT aren't you?

Do you have offices elsewhere?

 

[Steve KKK]

Steve KKK,

Just wondering where you are licensed to be a finance broker?

You are based in the ACT aren't you?

Do you have offices elsewhere?

Yes I am based in the ACT and every ACT broker must be licenced with the ACT Dept of Fair Trading if they wish to provide a service in the ACT (regardless of the location of the office of the service).

I know the rules are different in NSW.

 

[Rolf Latham]

Hiya

Hmmmmmm. must have been something in the broker's water last nite

Three of us up at all hours of the nite.

BTW, WA also requires licencing.

Rob, with regards to fees I was under the impression it was fine to charge a fee by law as long as it was at settlement, and wasnt regarded as an Up front fee ?

If you are right (and you may be) all of the MRP people would be in a lot of strife.

ta

rolf

 

[T.M.A.]

Hi Steve,

The reason I asked is because I was under the impression the ACT did not require licensing. They only required registration which was just a revenue raising thing for the Government as the fees were the same for brokers outside the ACT wanting to operate write loans for residents. At last check, the only State that had broker licensing was WA.

Rolf,

I was commenting on advice I received a while back while preparing my FBC for coded loans when this requirement came up last year. Also, various lenders do not allow the charging of fees for non-coded loans at any time and threaten to remove accreditation for those doing it. I also believe the MIAA does not allow it. It is certainly not allowed upfront or if a loan never settles.

Following your comments, I have some doubt now as to whether or not you can actually charge if the loan does settle but I will take a look around when I get a chance and confirm this.

 

[T.M.A.]

I found this on the ASIC FIDO website:

http://www.fido.asic.gov.au/fido/fido.nsf/byheadline/Using+mortgage+brokers+for+your+home+loan?openDocument

Fee for service
If you are just looking for a home loan, most mainstream brokers will not charge you any fees for their services. Even if you have had a troubled credit history or your financial situation is too unusual for mainstream lenders, you can probably find brokers who will assist you free of charge.

Never, in any circumstances, pay a broker an upfront fee to arrange a loan. In some States, this is illegal. Even where it is not, avoid brokers that charge you up-front.

Then there is the 7 page MIAA submission trying to cancel the prohibition on upfront fees regarding 'NON-CODED' loans which applies in NSW under the FBC regulations:


http://www.miaa.com.au/pdf/050214_miaa_submission_broker_reg.pdf

I don't have the time to keep searching for information relating to at settlement yet. If anyone else can assist, this would be appreciated.

 

[Rolf Latham]

Hiya Rob

I hear where you are coming from, reality is though its not illegal (i think ?), nor immoral (in my view) for someone to charge a fee for a loan that has settled simply because the majority of the profession choose not to do so.

This would be a restriction of trade, something which most states have laws about :O). If a broker believes they have a superior service and product, and they charge say 1 %, that is their call, and a free and efficient market will sort that out.

I suppose it would be similar to say to a GP, sorry matey, no more co payment or full payment from the patient legally allowed, you must only bulk bill.


ta

rolf