Dealing with Bank vs using Broker

[pennyk]

Question to all brokers... It looks like that in the future banks are not going to follow RBA when they set their interest rates and I can see that rate negotiations maybe regularly with the banks becoming more important, if you do not want to pay too much interest. Do you see that in the future you will be refinancing, organising current loans and negotiatiang new deals for all of your clients in the regular bases (let's say twice a year?) , even if they do not 'buy' anything new or have any other reason to refinance than better deal (saving money).

I'm not a broker, but I doubt that this will happen.
The amount of work involved in changing banks/accounts/ deposit of salaries etc would not be worth it. I think its unlikely that the difference between banks will be significant enough to warrant changing.
In the end, most people are lazy, and they will set and forget.

 

[Rolf Latham]

Question to all brokers... It looks like that in the future banks are not going to follow RBA when they set their interest rates and I can see that rate negotiations maybe regularly with the banks becoming more important, if you do not want to pay too much interest. Do you see that in the future you will be refinancing, organising current loans and negotiatiang new deals for all of your clients in the regular bases (let's say twice a year?) , even if they do not 'buy' anything new or have any other reason to refinance than better deal (saving money).

I see more work as a given, however refinancing regularly will fy a clients credit file the way things are scored these days.............

ta
rolf

 

[zimby]

I've asked myself the exact same questions quite recently.
I've been to see multiple mortgage brokers and had pre-approval from quite a few banks.
I got quite dogged on this issue as we were still building up our deposit and unable to actually Sign a contract and submit a loan application.
There are good and bad points with both options, alot of the replys from above are broker's replys, some get quite agitated with questions like your's as they get asked this alot(nicer wording goes a long way)
The question you need to ask the person you are relying on is how many properties do they own?
The broke rwho is organising our loan has 40+ investment properties.
Almost All of the bank representatives I spoke with only had PPOR and some were only renting.
While Bank employee's may know their products, Their products may not be the best for you.
Some-one with 40+ properties is bound to know something both you and the banker's don't.
Another plus, have you ever tried contacting your bank financer on the weekend or out of hours?
I would reccomend going directly to the bank if you only plan on owning 1 property or if you know exactly what you are doing.
Pick a Broker from the forums(hopefully one that will still deal with you) and ask them nicely to assist you, I bet within 1 hour of the converstion you will have learnt something new!

 

[Marty McDonald]

Sorry if I came across harshly but I do get tired of being used as a negotiation tool for people who really just want to stay with their bank but want a better discount.

If rate is all that concerns you go to cannex and use that info to negotiate a better deal with your lender.

 

[Peter_Tersteeg]

Question to all brokers... It looks like that in the future banks are not going to follow RBA when they set their interest rates and I can see that rate negotiations maybe regularly with the banks becoming more important, if you do not want to pay too much interest. Do you see that in the future you will be refinancing, organising current loans and negotiatiang new deals for all of your clients in the regular bases (let's say twice a year?) , even if they do not 'buy' anything new or have any other reason to refinance than better deal (saving money).

I don't see brokers refinancing existing clients that periodically and certainly not for a small cost reduction of 0.1% here and there. Despite all the hype from Mr Swan removing exit fees, there are still costs involved in moving loans and it will still cost you at least $500 to exit, assuming there's no establishment costs. This would suggest that for a 0.1% rate saving, you need a loan of $500,000 to break even to switch just once a year.

In most cases you'd want a rate saving of at least 0.3% to even consider moving based on rate savings alone.

No lender will always have the lowest rate so there's no point in trying to pick the absolute cheapest. The right lender will have the right products to best suit your needs, and the right lending criteria.

In the current environment it's the brokers job to find lenders and products that meet your needs, with a lender that's consistantly compeditive. My experience shows this is almost never the group that has the absolute lowest rate.

Getting 'the best rate' is like catching smoke. You grab it for a short period of time but it always disappears.

 

[Aaron_C]

Not to mention the clawbacks on commissions.

 

[Piston Broke]

Geez we still talking about this? Sometimes you can get a better deal going direct. So what, if you just want rate go direct. If you are not sure how to best structure your loans and to want stop yourself making mistakes talk to one of the brokers here. Not me though you sound like the type of client I don't want frankly.

Maybe we dont want to deal with you guys cause the general experience is your paid by the banks and work for yourself first, bank second and customer last?

ganadara - If you did go with the bank directly- whats the chances they will send you regular updates on what you need ...i dont know abt you but i been with NAB and CBA for 7 years and i haven't received any "loan updates" ??? Maybe it's in my spam folder ...who knows.

Any bank offering deals is more than happy to advertise in the mass media.

Sorry if I came across harshly but I do get tired of being used as a negotiation tool for people who really just want to stay with their bank but want a better discount.

It's called competition.
Your are in an industry where your supplier is also your competition.
To them your role to bring customers over from other banks, they then become bank "owned".

 

[Aaron_C]

Maybe we dont want to deal with you guys cause the general experience is your paid by the banks and work for yourself first, bank second and customer last?

That is a ridiculous comment about brokers, particularly those of us who are self employed. It is more true of bank sales staff.

 

[Bigtone]

nice work piston, hook line and sinker!

 

[Mick C]

Any bank offering deals is more than happy to advertise in the mass media.

Of course, but that's not what i meant; my post was about receiving regular update from the bank about their rates and if it's "still the cheapest". All well and good if they are the cheapest at the time you sign up- but like any business someone will alwasy take over when the time and condition is right.

And refinancing just for a small rate change of 0.10% for example...most of the time (90%) is not worth considering, so hence not worth arguing with the bank over such a small difference ( 0.25-0.3%+ is a diff story); as it's mostly likely only available to new customers only not existing.

Regards
Michael

 

[Piston Broke]

That is a ridiculous comment about brokers, particularly those of us who are self employed. It is more true of bank sales staff.

Entry into the market was so low that the industry was literally flooded with qwik buck hordes taking advantage of the RE boom.
Most brokers i hear about do not update their clients about anything, so a/a.
Ridiculous? Go out on a busy street and do a survey for a day asking "DO you use a broker? Did he tell you where to get a cheaper rate after the initial loan? Did he contact you at all after the initial loan?"

as it's mostly likely only available to new customers only not existing. l

Yep, they are shafting their alternate channels and existing customers.
More than once I walked in asking for a payout figure telling them they will be paid out in a few days.

The industry needs to grow some balls and ditch bad supply channels.

 

[Aaron_C]

Most brokers i hear about do not update their clients about anything, so a/a.
Ridiculous? Go out on a busy street and do a survey for a day asking "DO you use a broker? Did he tell you where to get a cheaper rate after the initial loan? Did he contact you at all after the initial loan?"

If all you are concerned about is the 'cheapest interest rate' at any point in time, then feel free to do it yourself at the bank. You'll probably do better. However, there's really no point chasing a new loan every year because that is not prudent for your credit file nor for your finances...inferring that brokers are rip off merchants because of this is just false.

I think your idea of brokers being only focused on doing your one deal and then forgetting about you must be framed by a bad experience in the past. I'm not sure who did wrong to you but that's not how people in the industry operate.

 

[wylie]

I cannot imagine our broker (also a friend) calling me every month telling us that we can shave 0.2% off if we switch banks .

How much would that cost us?

That is not why we use a broker.

 

[Kanemicm]

As a lead generator, I have experience in referring direct to the banks and to brokers. I was also a mobile banker for the NAB

Overall dealing direct with the bank gives you the ability to discount rates further then dealing with a broker.
Each mobile banker knows their limits and a number of banks at the moment have given the instruction to their mobile bankers to NOT lose a deal based on rate.

 

[MC1]

As a lead generator, I have experience in referring direct to the banks and to brokers. I was also a mobile banker for the NAB

Overall dealing direct with the bank gives you the ability to discount rates further then dealing with a broker. Each mobile banker knows their limits and a number of banks at the moment have given the instruction to their mobile bankers to NOT lose a deal based on rate.

Not true at all. Maybe as a lead generator "or take a phone number and pass it on" that might be the case.

But im sure alot of the brokers on here are 'gold" "premium" or diamond brokers with one bank or another and we negotiate better deals than going direct every day of the week.

I'm not sure how it works for you "refund home loan" type referrers though