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Is it just me or does this situation seem crazy

Discussion in 'Property Finance' started by Arcticfire, 20th Aug, 2015.

  1. Arcticfire

    Arcticfire Well-Known Member

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    Location:
    Newcastle
    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
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    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
     
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  3. spludgey

    spludgey Well-Known Member

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

    Richard Taylor Mortgage Broker & Brisbane Buyers Agent

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    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.
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Yep - sounds like it.

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

    Cheers

    Jamie
     
  6. spludgey

    spludgey Well-Known Member

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    When really you get rich off trailing commissions! ;)
     
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  7. TaylorChang

    TaylorChang Well-Known Member

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    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 :)
     
  8. Perthguy

    Perthguy Well-Known Member

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    Sounds good to me! Not sure what you are complaining about ;) :)
     
  9. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    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 $$$.
     
  10. spludgey

    spludgey Well-Known Member

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    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.
     
  11. Arcticfire

    Arcticfire Well-Known Member

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    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 !
     
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  12. Greyghost

    Greyghost Well-Known Member

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

    tomlemke Well-Known Member

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

    tobe Well-Known Member

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

    Arcticfire Well-Known Member

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    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
     
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  16. JonoD

    JonoD Active Member

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    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)
     
  17. Arcticfire

    Arcticfire Well-Known Member

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    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
     
    Last edited: 21st Aug, 2015
  18. tobe

    tobe Well-Known Member

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    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.
     
  19. Mick C

    Mick C Well-Known Member

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

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Many times brokers and bankers cant be bothered to rerun the deals.

    On a separate note.......................

    Concentration risk over what looks like a pro pack fee......... I could be wrong of course


    I wouldn't run it all through one lender unless there was a specific need to

    if at all possible id go 50/50 approx with the existing lender and split half off to say WBC who are doing similar pricing .

    be mindful that your banker might know something about your deal that your broker may not. Your banker may be telling you that the structure and lending isnt possible, rather than the pricing ........

    Pricing is pretty evens on retail and broker

    ta
    rolf