The intent of mortgage brokers

J

jmak35

Hi everyone,

Just been seeing a couple of brokers lately and they each gave us the same loan recommendation. It doesn't seem like the best loan around because I've found some myself that are so much better, in terms of fees, offset facilities, and interest rates. Just wondering, do brokers get more commission for certain loans than others? They seem to be genuinely helping us, but I just can't help but think that they are just pushing for a particular loan because it will give more commission over another. Is this ever the case?

Any feedback would be greatly appreciated.

Thanks!

jmak35.
 
jmak35 said:
Hi everyone,

Just been seeing a couple of brokers lately and they each gave us the same loan recommendation. It doesn't seem like the best loan around because I've found some myself that are so much better, in terms of fees, offset facilities, and interest rates. Just wondering, do brokers get more commission for certain loans than others? They seem to be genuinely helping us, but I just can't help but think that they are just pushing for a particular loan because it will give more commission over another. Is this ever the case?

Any feedback would be greatly appreciated.

Thanks!

jmak35.
Click to expand...


Give us some more info.

What is your situation, what r u trying to achieve, what did they recommend, what products did you find that were better?
 
Commissions are roughly the same for all loan products. Just because another loan product is 'cheaper' or has other features doesn't mean that you will qualify for the loan....that is probably why it wasn't recommended to you.
 
jmak35 said:
Hi everyone,

They seem to be genuinely helping us, but I just can't help but think that they are just pushing for a particular loan because it will give more commission over another. Is this ever the case?

Any feedback would be greatly appreciated.

Thanks!

jmak35.
Click to expand...

Hi JMak

welcome

your brokers will have provided u a disclosure of what lender pays what commission, thus you can ascertain the comms question yourself usually.

If this hasnt been provided then I can tell you that some lenders pay more than others..........but usually the differences come at a price for the broker to process the transaction. Lets just say some lenders need to pay panadol money !

To the extent that say WBC pays 500 for a 100 000 loan and Homeside pasy 650 for 100 000 loan.

Not quite the same in the end though because in this example WBC pays 15o trail during the first year, and homeside ZERO. and then the Hoemside trail increase over time (as the loan generates more profit that lender shares a little more than wbc)

Without knowing what loan was recommended and what your specific needs and circumstances and resources are, it is not possible to ascertain if your loan recommendations are a case of "commission breath".

I would offer the following and I know many people wont like it.

The fact that you have sought more than ONE credit advice opinion, suggests you have a lack of trust in your adviser(s)........

This in itself is a concern to me, especially as you are of the opinion that you can do better with your own research. Perhaps act on your instincts and choose your DYI product, but make sure you are comparing apples to apples and not oranges to carrots because they are the same colour.

Often when you get the same lender/product recommendation it has more to do with the narrow product spec the borrower has provided or more usually the narrow "credit " for that the borrower fits into.

Have you asked the brokers why they have recommended the product(s) they have ?


ta

rolf
 
Rolf Latham said:
Often when you get the same lender/product recommendation it has more to do with the narrow product spec the borrower has provided or more usually the narrow "credit " for that the borrower fits into.
Click to expand...

This sounds to be the case.

As the others have said, the commissions don't vary a great deal when it comes to lenders. Some of the non-conforming lenders pay more but that's the sort of work I personally don't want to pick up.

Ask your broker why they recommended the product in the first place.

Cheers

Jamie
 
Realistically there's very little difference in the commissions paid by most lenders.

If several brokers made the same recommendation, either there's a conspiracy out there or there's a concensus as to what's the most appropirate loan for you. At this point you likely need to determine which broker you're most comfortable with.

Most of the people I've dealt with don't care too much about how much commission is paid. At that point they've got a clear understanding of why the recomendation was made.
 
Jmak ...

You need to remember that brokers are only there to rip you off, so that you never ever refer any of your friends or family to them as they dont want the business .....

and seeing you know so much about loan products, why engage with a broker in the first place. Surely you could have done it all on your own
 
Rolf Latham said:
I would offer the following and I know many people wont like it.

The fact that you have sought more than ONE credit advice opinion, suggests you have a lack of trust in your adviser(s)........

This in itself is a concern to me, especially as you are of the opinion that you can do better with your own research. Perhaps act on your instincts and choose your DYI product, but make sure you are comparing apples to apples and not oranges to carrots because they are the same colour.

ta

rolf
Click to expand...

i disagree i sought 3 Brokers, its not that i didnt trust them they just didnt know what they were doing or it was just the same thing for anyone not personalized for my needs

in saying that if they both selected the same package then they are both probably on the right track

if you dont like either of there suggestions maybe try one on the forum
one of my fist Q's to the MB were how many properties do you own
first one didnt own any and gave lousy advice
second one owned a few and gave me there standard loan structure as they didnt really ask for anything from me

then next one (on the forums) knows what there talking about, and you can see by reading all the MB posts that they all give lots of good information and its free, and if there living and breathing the forum they would own a house or 2
study there posts and see who suits you the most and maybe give one of these guys a go i have and i wont look back

i really dont mind how much commission they make so long as they choose the best loan to suit my needs
 
BMan said:
i disagree i sought 3 Brokers, its not that i didnt trust them they just didnt know what they were doing or it was just the same thing for anyone not personalized for my needs

in saying that if they both selected the same package then they are both probably on the right track

if you dont like either of there suggestions maybe try one on the forum
one of my fist Q's to the MB were how many properties do you own
first one didnt own any and gave lousy advice
second one owned a few and gave me there standard loan structure as they didnt really ask for anything from me

then next one (on the forums) knows what there talking about, and you can see by reading all the MB posts that they all give lots of good information and its free, and if there living and breathing the forum they would own a house or 2
study there posts and see who suits you the most and maybe give one of these guys a go i have and i wont look back

i really dont mind how much commission they make so long as they choose the best loan to suit my needs
Click to expand...

How many properties a Broker owns doesn't necessarily mean they are more knowledgable when it comes to financing investments properties (not everyone has a buy and hold strategy)....i have personally experienced that! A few years ago when we first started out we went to a fairly 'reputable' broking firm that hold property seminars, courses, and run fairly extensive advertising in the area...their Brokers were all quite experienced investors and yet, they still managed to stuff up our straight forward development loan application.....

With regards to the original poster, i get where you're coming from but just keep in mind that the cheapest loan product with all the bells and whistles may not be a product suitable for you - different banks/funders have different requirements but why not go into the branch of the bank you mentioned that had the good rates and see if you qualify for the loan.

Good luck!
 
jmak35 said:
Hi everyone,

Just been seeing a couple of brokers lately and they each gave us the same loan recommendation. It doesn't seem like the best loan around because I've found some myself that are so much better, in terms of fees, offset facilities, and interest rates. Just wondering, do brokers get more commission for certain loans than others? They seem to be genuinely helping us, but I just can't help but think that they are just pushing for a particular loan because it will give more commission over another. Is this ever the case?

Any feedback would be greatly appreciated.

Thanks!

jmak35.
Click to expand...

Hi Jmak

As others have said all comms have to be disclosed so you can judge for yourself. However, I've found that there's so many variables with each lender that it's impossible to know all the nuances and possible ads/disads with them all- its about much more than the interest rate being quoted.

A good independent and experienced broker also adds the value-add of good SERVICE- something that can't be underestimated especially if you intend to have more than one home or IP loan in your portfolio. I know that having my properties always settle on time (mainly in part due to the service on the part of the broker in ensuring it all comes together) and a good follow-up service ensures that I leave it all to his more than capable hands every time :D
 
jmak35 said:
Hi everyone,

Just been seeing a couple of brokers lately and they each gave us the same loan recommendation. It doesn't seem like the best loan around because I've found some myself that are so much better, in terms of fees, offset facilities, and interest rates. Just wondering, do brokers get more commission for certain loans than others? They seem to be genuinely helping us, but I just can't help but think that they are just pushing for a particular loan because it will give more commission over another. Is this ever the case?

Any feedback would be greatly appreciated.

Thanks!

jmak35.
Click to expand...

- Yes commission do differ btw the banks, but not by much...
- Yes, like every industry, we do get some bad eggs; but generally speaking brokers ( especially the independent ones) care more about reputation, repeat business and continuing business compared to a few extra dollar or two...

Since mutiple brokers have given you the same recommendation; the chances any "bad egg/ advice based on commission " going on is pretty low i would say...unless you approached the same company lol :p

Feel free to post some basic details on your situation, the brokers recommendation and what you have found.:)


Regards
Michael.
 
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