Broker's commission on home loans

so would 2 years be a 'safe' time to review loan set up (or plural) to minimise the instigation of clawback from broker (to bank) and hassle of re-claiming costs from client?

 

Yep 2 years is fine - only exception I can think of is Advantage which from memory is longer.

 

2 years is a good rule of thumb - when in doubt always speak with your broker.

Just like you wouldn't want your broker to muck you over for thousands, it's courtesy to make sure you don't do the same!

 

I believe the average life of a loan nowadays has dropped to around 4-5 years - down from 6+ in the noughties. This naturally should increase the extent of clawbacks.

Some brokers input a charge back - not sure how successful they are in claiming this back.

Nonetheless, its rare that it occurs to straight refi's of customers - most of the time for people selling. Generally people don't like to refinance right away unless there's a specific need for it.

As a general rule, most investor broker clawbacks arise on same loans i.e. moving a loan previously written for a strategic reason. This arises for investors looking to grow and taking advantage of lender tools - e.g. higher desktop vals, equity release reasons, lender policy changes, taking advantage of 85% no LMI for bridging cases etc.

 

.62% on a 300K loan


would be initial $1800 payment and trailer is a fractional percentage too
So if trailer fee is (guess) 0.3% that is almost $1000 a year

These % fees would be in your loan docs

so for a 2 year loan, total renumeration to broker would be approaching $4000
Are these figures in the ballpark ? anyone know?

 

trails would probably be 0.15% and with some lenders there is no trail in year 1.

 

Upfronts generally about 0.6%
Trails generally 0.15%

 

I have sold a property and checked with broker prior to see if clawback period had ended.It had just, but if it hadn't I would have paid him the clawback amount. I dont expect anyone to work for free

 

I might start doing this too. I just had a client sell after 11 months after purchasing because he changed his mind. That is approx 50 hours worked for free

 

You should. Planners, accountants, lawyers etc- all charge fees. Even trades charge call out fees just to come and look at something... Brokers are well and truly underselling the work they do.

The problem is, most brokers are petrified of charging fees because clients can go to banks and get a basic sausage factory transactional type of service for free...and that works for 1,2,3 deals... as long as you dont mind being crossed, or have no ambition beyond what a bank can offer you before you hit a wall.

Then, when you do hit a wall, a skilled broker like me or some of the others here is asked to undo the mess, restructure the whole portfolio and get things moving again... but all of that work - and it is an extensive amount of work - is subject to clawback.

As brokers never really earn the money "clear" until 2 years after the loan settles, as we can be clawed back any time during that 2 years.

I think brokers charging for their time is something that deserves far more consideration.

 

anyone know the clawback scheme on Suncorp bank, timeframe and % of clawback, cheers

 

Depends on aggregator

Probably 100% during first 12 months and then sliding scale until 18 months and thereafter nil

 

Thanks terry

 

Yep, mine increased as a couple of lenders changed policy from 3 on one title to 2 on 1 title for construction just after DA was approved.

One I salvaged as I sent it to RAMS and got a share of the UF comms and the other I lost out on and copped 2 x claw-backs totaling circa 7k, ouch!

Only positive from my side of the fence post APRA/ASIC is the loan book is more sticky due to val shortfalls and servicing issues. Been slow going ever since and looking for ways to diversify income until the Perth market picks up val wise, serviceability will still be an issue for many multi property holders though.

Time to come up with alternative strategies and already thought of some.

 

So does that mean a broker only makes $1800 on a $300k loan?
sounds very low to me
can they do a 4-5 loans a week?
(im not in this industry)

 

Where are the claw back fees generally in the agreements? Been looking through some of mine and I can't seem to see anything of the like... Thanks

 

Credit Proposal Disclosure Document usually i was told, by i cant find any of clawback statements in my one , though by memory i signed a seperate document stating a clawback fee would be applicable which i dont have a copy of

 

Pretty much

The norm is 0.65% of the loan amount upfront.

Then aggregators might take a percentage of that.

Then there's business overheads, etc.

If a client then closes down the loan within 24 months it ends up costing the broker a fair bit - not only in lost income but from money spent on getting the loan set up.

Cheers

Jamie

 

Go tell the Royal Commission and various other BS reviews that.