Is it just me or does this situation seem crazy

I currently have all my banking and loans with CBA

about 3.3mil in borrowings

I currently get a 1.17% discount of the SVR ( abit less on the investment properties now due to aprha changes )

Earlier this year I asked my personal banker to see if I could get a better discount - he said no

I was chatting to a mortgage broker recently who said he got a 1.3 discount on a 1 mil lend with CBA

I asked him if he could get me a better deal - and he managed to get me the same discount 1.3% ( and a bit less on the investment loans )

So now i'm filling all this paper work which shows that the broker is going to get excess of 10 K in upfront fees + plus a trailing commission

So I'm going to stay with the same bank with the same loans ( he will help me un x coll some of the loans ) at a bigger discount

I win - the broker win - the bank losses

This seems crazy to me

 

I can't see how the broker is going to get paid $10k in upfront comms.

All he's doing is requesting a pricing discount on your loans - not writing new ones.

He should get paid ongoing trail (because he's done a great job getting you a discount that the banker didn't provide) - but again, I'm not sure how that would occur when he's just requested a pricing discount.

Cheers

Jamie

 

It might just be what the broker's standard calculator spits out, assuming that they're new loans.

 

Yes probably come straight from his Credit Proposal Disclosure form and automatically shows 0.65% plus trail.

As Jamie says no increase in borrowing means no up front for the broker. Sure he might get the trail and good luck to him.

 

Yep - sounds like it.

The same software that makes it look like we get rich of pre-approvals

Cheers

Jamie

 

When really you get rich off trailing commissions!

 

I believe it is just a standard form computer generated for you to sign.
The commission is only if increasing the loan amount like doing the top-up/cash out/ internal refi.
Don't worry about commission as long as you get a good deal, that's it

 

Sounds good to me! Not sure what you are complaining about

 

Definitely won't get paid upfront from this, only a trailing commission. Would just be disclosure doc spitting out an estimate based on new debt.

But as brokers we end up doing all kinds of deal for the 'love' of the job, not $$$.

 

Seems like it might be a good broker that looked at what's best for you rather than what makes him the most commission. Otherwise he may well have said that you should switch banks and made up a reason why.

 

Sorry about the delay in this reply

I was just waiting on clarification from the broker

You guys are right - just the trailing commission - looks like just a standard printout showing the upfront commission as if it was a new loan

Though I would have been happy if he got the upfront commission too

Thanks for the help in clarifying that issue !

 

3.3m on say .15% @ say 85= $350 per month for a pricing request is not bad coin!

 

Depending on your strategy its not always best to solely focus on the best rate.

 

Which is a bit less than the client is saving each month.

 

I'm very happy for the broker to get the trailing commission - or even the up front commission

Though it annoys me that my own private banker can't get me a better deal and I have to go outside to a broker to get me a better deal at the same bank

I should also point out that my banker doesn't think my broker can pull it off

 

If he is also u crossing loans for you, is that resulting in new loan account numbers?

I recently did a similar transaction - internal 'refinance' of loans originally set up by a banker through the same bank via a broker. Broker earned $12kish upfront ( my OO rate went from 4.55 to 4.11)

 

one of the properties has 4 seperate loans on it ( long story ) - so amalgamating that into one and 2 of the other loans where just in individual names and the new loans would be in both names - so I assume new acct numbers

Would that normally trigger - upfront commissions to be paid - not that I really care - just interesting to know

 

most lenders wont pay new upfront even if the loan numbers/structures change. ANZ do, as long as the previous loan was through a different channel/aggregator.

 

Good work and credit goes to your current broker! His a keeper.