Should I Use More than One Mortgage Broker?

witsa on 01/09/2020 - 23:58

I'm considering getting a mortgage broker to see if I can get a better rate on my home loan.

Just wondering, is it a good idea to get multiple mortgage brokers?

I'm guessing as mortgage brokers get commission from the banks, each mortgage broker isn't going to have a deal with every bank - therefore, one using one mortgage broker might limit my options to only banks they are getting commission from.

If I stick to just one, what if they're really bad? Is it like going when you sell your house through a real estate agent and you sign something to say you can't go with anyone else for a period of time?

Financial Mortgage Broker

Comments

  • sweefu on 02/09/2020 - 08:44
    +6

    Mortgage broker here.

    There's no harm in meeting with several brokers to decide who it is you want to work with.

    Few points on the above:

    1. You'll find that most brokers have a very similar panel of lenders

    2. The cheaper, online only lenders (Athena, Tic Toc) do not work with any brokers, they are direct only (but seem to have quite restrictive policies)

    3. We as brokers are paid on successfully settling a loan, so while I am happy to meet with anyone, discuss their requirements and provide some indicative pricing, if I get the feeling I am just being shopped with other brokers/lenders I will cease dealing with the customer very quickly.

    • John Kimble on 02/09/2020 - 09:32
      +1

      How do you communicate point three? Or do you just cease responding all together with no explanation?

      • sweefu on 02/09/2020 - 10:00
        +5

        It doesn't happen often, but if I get the feeling I'm just being shopped I basically explain what I said above:

        "I only get paid on success, and have already invested significant time into your file.I feel that you are not committed to using my services, so I am unable to assist any further. Best of luck with your future plans."

        It may seem a bit extreme, but I've found that if someone is still not convinced that I am the broker to assist them once I've completed an assessment and provided pricing, they generally are not going to stay around long term regardless of the service provided, so it's better to just move on.

    • witsa on 02/09/2020 - 14:42

      By pricing does that mean you charge the customer and not the banks?

      • sweefu on 02/09/2020 - 17:00

        By pricing I mean the interest rates I can achieve for the scenario discussed.

        For residential loans I don't charge any direct fees to the customer - I am paid commission by the lender once we've settled.

        • cloudy on 04/09/2020 - 16:25

          Is your commission the same whomever the lender is? Or is there still some difference in commissions with some lenders over another?

          • sweefu on 04/09/2020 - 18:23
            +1

            @cloudy: Most lenders are very similar.

            In residential lending they range roughly from 0.60% - 0.65%

            I couldn’t tell you what each lenders pays.

            • cloudy on 04/09/2020 - 19:47

              @sweefu: oh cool, is that circa .6% a once off, or you get .6% pa for the life of the loan?

              • sweefu on 04/09/2020 - 20:06
                +1

                @cloudy: Very generally, most lenders pay us as follows:

                0.65% of the net settled loan amount, paid the month after settlement. To explain net loan amount:
                If I settle a $700k loan, but $200k of it was cash out to be used in the future towards a renovation, I am paid of the drawn amount of $500k

                0.15% of the loan balance per annum, but paid monthly (so 0.15% / 12)

                As part of this, I handle all ongoing client requests, variations, and complete an annual review of every clients facilities every 12 months.

                • cloudy on 04/09/2020 - 21:00
                  +1

                  @sweefu: oh cool, thanks so much for the insights. :)

                  • [Deactivated] on 05/09/2020 - 09:19

                    @cloudy: It is all part of the loan contract. Credit license holder must disclose all fees, including commission paid to broker.

                    • cloudy on 05/09/2020 - 20:23

                      @[Deactivated]: Yeam, thats probably why i need to ask, coz i'll never get a home loan

                • Ughhh on 05/09/2020 - 11:23

                  @sweefu:

                  0.15% of the loan balance per annum, but paid monthly (so 0.15% / 12)

                  Curious, is the 0.15% only on the balance of the loan or balance minus offset?

                • Pandaboss on 17/11/2020 - 19:51

                  @sweefu: Our broker has not contacted us since we signed up with the loan. Jaw dropped when I read you do a review every year.
                  Its been 5 years. I am now in the process of refinancing and going to go through a broker.

  • TheBilly on 02/09/2020 - 12:47

    I think by definition it is counter productive. It would make sense if you shop around to several lenders directly. But the whole purpose of mortgage brokers is that they shop around to multiple lenders for you. I would recommend going to 2 brokers and go with independent ones that have a wide variety of lender access - for example Aussie and Rams would only do one lender but smaller brokers may have access to 10 lenders.

    • witsa on 02/09/2020 - 14:41

      Aussie and rams only do one lender? How would that make sense? At minimum wouldn't they do all of the big 4?

      I wouldve thought the bigger ones have access to more lenders as they have leverage to negotiate a better rate.

      • TheBilly on 02/09/2020 - 14:49

        I'm not a broker so I'm not 100% sure on this, maybe somebody can correct me. But I think Aussie is owned by Commonwealth Bank and RAMS is owned or partnered with Westpac so they will push you towards their product.

        • sweefu on 02/09/2020 - 16:59

          RAMS only sells their own RAMS product.

          Aussie is a full mortgage broker, and have access to most lenders in the market.

          • [Deactivated] on 05/09/2020 - 09:22

            @sweefu: RAMS is a wholly owned sub of WBC. Likely rebadge of either WBC or StGeorge products.

            Aussie is wholly owned sub of CBA. They offer other lender's products.

            • sweefu on 05/09/2020 - 10:56

              @[Deactivated]: Yes, you’ve essentially just confirmed what I said above?

              • [Deactivated] on 05/09/2020 - 11:16

                @sweefu: No. I have combined what you and TheBilly have said.

    • suti on 06/09/2020 - 22:17

      An "independent" broker is one that does not receive commissions from banks and operates under a flat fee model.

      A broker cannot use the word "independent" to mean "Independently owned" unless they fulfill this criteria. Report the company to asic if they are illegally using the word.

      https://asic.gov.au/about-asic/news-centre/find-a-media-rele…

  • ilsan0 on 02/09/2020 - 17:03

    Mortgage broker here.

    No issues dealing with multiple brokers.
    End of the day, the broker should present your scenario to multiple banks and get you the best possible rate and cash back if available.

    The advertised rate versus final rate depends on LVR, income, risk etc…

  • [Deactivated] on 05/09/2020 - 09:22

    It is silly. If someone is to shop around different brokers, might as well not use one.

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