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Guest
Guest
Ryan Ryan Ryan. Mate you just don't understand what a mortgage broker is all about. Let me correct a few misconceptions that you obviously have about brokers.
Anyone considering taking out a loan or wanting to check that their existing loan is being charged a good interest rate would be mad to go to a bank instead of a broker.
For example assume a client goes to their Bank the NAB and speaks to the local home loan manager at manly branch to borrow a $2m home loan. Firstly that person probably has at all of 3 months experience in lending and usually english is not their first language (in jest).
Secondly they will tell the client that NAB can offer a discount of 0.70% discount off their standard variable rate. If the client is an idiot they will accept when they tell them that they cannot get a better interest rate elsewhere.
However if the client is smart they will contact 2 or 3 brokers in the area and find out that they can obtain a 1% interest rate concession from either CBA or St george.
The client can obtain a 0.25% better interest rate going through a broker than his own Branch. Believe me it happens all the time. And it doesn't cost the client a cent as the bank pays the broker direct from its profit (ie the commission payment is not passed on to the client in any way). The client has also saved themselves countless hours of investigating what other lenders have to offer of they tried to do it themselves.
If you think that a $2m loan is unrealistic then asume the client wants a $300 loan instead. He goes to his NAB branch and is offered the choice of a professional package with an interest rate of 7.62% pa and a $375 annual fee or a basic loan @7.87% pa.
The same client then goes to a broker who says that ING can give him an interest rate of 7,54% pa or Heritage Building Society at 7,45% pa. the client takles the cheaper loan which also comes with no ongoing fees.
Your comment about brokers putting clients with lenders who pay the most commision is absolute crap. 85-90% of my clients want to deal with the 5 major banks. The other 10-15% deal with lenders such as heritage, ING, Ciitibank, Bankwest and Suncorp.
All of the lenders that I have mentioned pay exactly the same commission rates so there is no benefit to me as a broker to put my client with any one particular lender. I simply put the client to who has the best rate and product features that the client wants.
The lenders who offer higher commissions are generally the second tier lenders such as Liberty, Bluestone etc who deal with clients who are discharged bankrupts and who have numerous defaults on their credit history. They offer higher commissions as they charge their clients nterest rates of 8-10%.
Another benefit of clients dealing with a broker is that we are their bank manager for as long as we are still a broker (I have been a broker for the past 10 years and will probably be for another 10 at least).
Being with NAB you know how often you get moved around from branch to branch. How many times have you come accross clients who said that they had a great relationship with their bank manager until the Bank moved him/her.
The new manager is a dickhead and the client then starts to look at taking his business elsewhere. I still deal with clients that I dealt with 15 years ago in the Bank. They deal with me because they know that I get them the best deals that I can.
There are many great brokers on the northern beaches and my clients wouldn't deal with a bank lender direct ever again. I would say without a doubt that the majority of my clients have received a better interest rate from me than they would have by going direct to a bank. They have also received better service and can deal with someone who knows their financial situation.
There ends your lesson in mortgage brokers. I hope that you now have a better undestanding as to how we work. 😀
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Your lesson is substantially flawed Fro.
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WTF are you on about Ryan, Its got nothing to do with me.
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Ryan has no doubt just come back from one of his corporate lunches.
😀
