Q: There’s a lot of noise coming out of the Banking Royal Commission about mortgage brokers, the commissions they receive and their ongoing trailing income.
We’d like to ask, if as some are suggesting the mortgage broker model is changed to pay for service and abandoning trailing income what impact would it have on consumers in terms of home loan competition, interest rates, service levels, convenience and the cost for them to obtain a home loan ?
What impact would it have on the overall home loan industry?
A: If they move to a fee for service model competition will be reduced as major lenders will lead consumers back into branch land on the false pretense that they have their best intentions in mind. They do not. I have worked for majors. They push a small set of products on clients whose finances are as unique as their fingerprints. Bank employees have KPIs brokers dont. Think about that for a while.
Brokers are there to review your debt position at particular points in your life and steer you away from unhealthy money habits. To give you the best option that suits your requirements and objectives. To be a long term debt adviser. Banks are transactional not relational.... oh sorry they are. If you have millions in net wealth.
Q: Investment loan has been fixed for 3 years and about to mature - $750,000 loan with CBA. We would like to keep the loan interest only and they have now offered 4.75% variable. That seems extraordinary high… what is the market rate?
A: Hi Angus,
The rates for INV I/O actually start from 4.09% fixed which is the market leader as of today. The reason why CBAs rates are higher than some other lenders in the market is due to their costs of business compared to smaller yet reputable lenders that can offer competitive rates.
I am a mobile broker based in East Perth or I can travel to you. My number is 0432 297 765 should you wish to have a call.
The importance of good customer service - Janine Leafe of Informed Loans
How casual income can affect your ability to purchase property - Janine Leafe from Informed Loans
Q: Hi, I have a young family and want to go back to work and thinking of starting my own mortgage broker business. Previously I had 8 years in lending with one of the major banks and wondering if I should just go out of my own or join a franchise type model. I’d really like to get the thoughts of others in the industry and to also ask what else I should be considering, thank you
A: Hi Melanie
I would not go down the franchise route either but that is my personal opinion on my own experience in Mortgage Broking.
The problem is people think buying a "brand" will bring business and it’s not the case. You must be business savvy and be able to have processes, modelling, a strong plan and build a culture to sustain a successful business.
All the best
The difference between genuine savings and a deposit - tips with Janine Leafe from Informed Loans
Negotiating tips with Janine Leafe from Informed Loans
Q: Hello, on a commercial property loan of $330k from a tier 1 lender we are borrowing about $120,000 through our SMSF. Are such fees usually requested by the broker, the broker wants to charge $1,000 upfront? ? Is this standard industry practice for non resi loans or a matter of which broker can get away with these fees from the borrower?
A: Hi Fiona
In this case sadly the Broker is taking into consideration the minimal commission received for the loan application to the lender as the borrowing limit is quite small. The fee being charged is up to their discretion and also your choice to take up their service.
If any client of mine wants a small loan I write the business regardless because to me a client is for life, not a one off transaction. This broker is putting value on the dollar versus the client relationship. Shop your business around if you do not feel comfortable.