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Brokers commissions

Discussion in 'Property Finance' started by MBowen, 28th Jan, 2016.

  1. MBowen

    MBowen Active Member

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    Do brokers get commissions for refinancing with the same bank? For example I have 3 loans with CBA originally IO for all 3 two are coming up to change to p and I. I asked my broker to refinance all 3 back to a thirty year loan term, IO for ten years preferably and fixed for the next 3 years preferably with cba. They seem unwilling to do it. Is it a cost thing for them like if they took all 3 loans to another bank they would even get their upfront commission again as well as the continuing trail wouldn't they?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If they wrote the loan they pretty much get nothing for it, hence his unwillingness to do so. If you get a different broker to do it, with CBA they'll pick up the trail so at least get something to make it worth their while.

    If they took you to another lender, they'd get full commission again.
     
  3. Redom

    Redom Mortgage Broker Business Member

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    I think its only with ANZ you'd get the full upfront commission again.

    If you service on the loans and will meet CBA policy, just push your broker a little more and he should do it. Brokers get paid a trialling income to handle this sort of request (maintenance of a loan).

    If not, i'm sure another broker would be willing to do it for you and pick up the trialling income your current broker is earning. If your existing broker thinks he may lose the trial, it may get them into gear.
     
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  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Brokers don't get paid again for renewing an interest only period as you've described. If the application involves increasing the loan, the broker will get paid for the increase, but not the existing loan. As a result most loan increases aren't profitable either.

    A reasonably sophisticated brokerage office will have costs of about $1,000 - $1,200 per loan written. Renewing an interest only loan usually requries a full application. Needless to say it's a net loss to the broker.

    That said, brokers also receive trail commission which is expected to be compensation to the broker for the ongoing servicing of the client in this manner. For some clients this is money for nothing, for others it doesn't cover costs. Overall it's a fair arrangement.

    If your broker isn't willing to process an interest only renewal or a top up based on profitability, you need to get a new broker. They're being lazy and potentially holding you back by putting their interests ahead of yours.
     
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  5. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Can a CBA employed broker do the IO refinance as a way to resolve this issue?
    Or would this be not advised?

    Or there's plenty of great brokers on here, and sounds like the brokers on this thread are willing to do for you.
     
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's your brokers job to sort this out - it's why they're paid a trailing commission.

    If they're unwilling to do it - take your business elsewhere.

    Cheers

    Jamie
     
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  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Westpac and amp too.
     
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  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    No. The CBA won't pay for money they've already funded.

    The ANZ, AMP and Westpac will pay a full commission under certain circumstances, but not in every case. They certainly don't pay for an interest only renewal or a top up.
     
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  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    It would be the same as going ot another broker - the existing broker would lose his trail.
     
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  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    More to the point

    Lets not assume in this Asic challenged world that an existing lender will renew an IO period where their max has been exceeded

    ta
    rolf
     
    Terry_w likes this.