Mortgage broker commission

Discussion in 'Loans & Mortgage Brokers' started by Chreee, 12th Jan, 2020.

Join Australia's most dynamic and respected property investment community
  1. Chreee

    Chreee Member

    Joined:
    17th Oct, 2016
    Posts:
    21
    Location:
    Sydney
    Hi everyone,

    Just wondering if i change mortgage brokers but dont change lenders or refianance.

    What happens to the the commisions? As in who gets what. Does the new mortgage broker recieve any commisions?

    Thanks in advance
     
  2. gerege

    gerege Well-Known Member

    Joined:
    23rd Mar, 2018
    Posts:
    92
    Location:
    Qld
    New mortgage broker doesn’t get any commission until he does a new mortgage. What do you want you’re ‘new’ broker to do? He has to put a loan thru to get money.
     
    David R Sutantyo likes this.
  3. Chreee

    Chreee Member

    Joined:
    17th Oct, 2016
    Posts:
    21
    Location:
    Sydney
    I want to switch brokers because when i try to contact my current broker he has no time foe me and he's response time is really poor, so i want to change brokers but not lender or product just yet. Would the new broker get the trail commission?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Plus Member

    Joined:
    9th Jun, 2006
    Posts:
    27,093
    Location:
    Australia wide
    Brokers get paid on a loan settlement. If refinance or pay out loan in first 2 years some or all of that commission com to be repaid
     
  5. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

    Joined:
    14th Jun, 2015
    Posts:
    3,712
    Location:
    Adelaide & Sydney
    Original broker did the work, they get paid.
     
    Archaon likes this.
  6. Morgs

    Morgs Well-Known Member Business Member

    Joined:
    7th Dec, 2017
    Posts:
    844
    Location:
    Sydney NSW
    Nothing will change in terms of commissions until you change products or refinance with that new broker.
     
    Terry_w likes this.
  7. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,966
    Location:
    Perth WA
    What exactly would you like your new broker to do? Usually the work they do will end in a new loan so you'll end up on their books eventually.

    And if they do a good job, the existing lending will likely make it's way there at some point.
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    8th Apr, 2012
    Posts:
    3,648
    Location:
    Canberra, Brisbane and Sunshine Coast
    As the others have said - the original broker retains the trail while the loan account is still active.

    However - if you purchase again or need to refi at some point - the new broker will get paid.

    Cheers

    Jamie
     
  9. Chreee

    Chreee Member

    Joined:
    17th Oct, 2016
    Posts:
    21
    Location:
    Sydney
    Thanks for all the responses
     
    Terry_w likes this.
  10. Indmr

    Indmr Active Member

    Joined:
    28th Jan, 2019
    Posts:
    39
    Location:
    Melbourne
    The broker who will get the loan through the lender will get the commission and trail.
    As long as you have not signed the application and the loan has not progressed with the lender.
    All you have to do is inform your current broker, you don't seek his/her services.
    Incase your current broker has put the application through. I suppose he/she will have to withdraw the application from the lender.
    Once application has been withdrawn new broker can put the application with the same lender.
     
  11. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,444
    Location:
    QLD
    This is a perfect example of "What Not To Do"- unless there's an extreme reason why, no one should ever do this to a broker. In this scenario, the original broker did all the work and yet the new broker is the one that gets paid for the original brokers work. Never do this.
     
    Property Twins likes this.
  12. Indmr

    Indmr Active Member

    Joined:
    28th Jan, 2019
    Posts:
    39
    Location:
    Melbourne
    Poor customer service has a bad impact in every business.

     
  13. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,444
    Location:
    QLD
    You don't get 99% of the way through an interaction to then decide it's poor service - you know well before then.
    OP was referring to an existing loan that is already in place not a new application that's almost lodged
     
    Archaon and Property Twins like this.
  14. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,128
    Location:
    Adelaide, SA
    Often hear and see complaints that service was great until loan funded, then nothing.
    Pretty poor form when it happens, get paid upfront, continue to collect trail which is payment for ongoing service which isn't been provided.
    Whilst it's great to say cut ties early, it's either not always visible earlier as per above or some cases due to time frames required to proceed.

    Wonder if a simple email to the broker stating concerned about the lack of post funding service/communication and thinking of refinancing elsewhere.
    That would give the broker the opportunity to lift or they might be happy to see the client walk if hasn't been a good interaction.
     
    Indmr, albanga and Terry_w like this.
  15. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,444
    Location:
    QLD
    In the scenario you mention, where the loan settles then the service goes bad yes of course it's poor form on the brokers part. If you want to be a successful broker building long term client relationships then you wouldn't do this.
    The scenario I was responding to, where you get a broker to do 99% of the work then just give it over to another broker to complete the deal and get the comm (for minimal work), that is the thing I have an issue with.
    If ongoing service is not being provided then the only way for the new broker to get the trail is to refinance it via the new broker.
     
    Brady likes this.
  16. Never giveup

    Never giveup Well-Known Member

    Joined:
    13th Oct, 2018
    Posts:
    513
    Location:
    Sydney
    Bit different question but around same lines-

    If broker gets paid set commission or fee by banks or lending organisations then why brokers do not work with all the banks or lending orgs?

    E.g. If someones cirsumstaances are changing and their currentloan doesn't have the flexibility and want to change but broker only works with couple of banks that may not be helpful then customer will look for a new broker and current broker will loose the client.

    Bit of risk in involved on both sides:Client and new broker need time to sync with eacother to obtain the outcome and no hurantee if this broker is working with all lending parties and Existing broker will loose commission if changing within the 1st 2 years...
     
  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Plus Member

    Joined:
    9th Jun, 2006
    Posts:
    27,093
    Location:
    Australia wide
    Some are not able to as they don't have their own credit licence. Some lenders don't deal with brokers either
     
  18. Never giveup

    Never giveup Well-Known Member

    Joined:
    13th Oct, 2018
    Posts:
    513
    Location:
    Sydney
    Thanks @Terry_w

    That mean a client will only find out about the products that one particular broker deal with...hummm that can be a road block as no one want to loose a client and general public is not a subjact matter expert in this field to find out about everything
     
  19. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Plus Member

    Joined:
    9th Jun, 2006
    Posts:
    27,093
    Location:
    Australia wide
    Yes no broker would have ever lender on their panel
     
  20. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,587
    Location:
    Melbourne, Nationwide
    You'll also find that brokers tend to have favourite lenders. I've currently got over 30 lenders on my panel, but I'd probably write loans with less than half of them in any given year. There's lenders on my panel that I've never written a loan with.

    The reasoning is that the lenders that are frequently used tend to match well to the general profile of the brokers clients. Personally I don't market to people with credit problems, so I rarely even look at lenders specialising in these products.

    I do have lenders on my panel that cater to my market. Lenders with good offset account, generous servicing profiles, cheap rates for owner occupier and investors alike with a range of policies that tend to fit the types of people I usually deal with. I've gotten to know those lenders processes and quirks reasonably well so I can deal with them more effectively than the lenders I don't use.

    Think of the brand of coffee that you like to drink. Why don't you drink every brand of coffee? Odds are that there's one that you haven't tried that is cheaper than your regular brand, or another will actually taste better than your regular brand. Why doesn't your local supermarket stock every brand of coffee that's sold anywhere in this country? Not every brand of coffee wants to be distributed via your local supermarket, but you don't expect the supermarket to tell you about the varieties of coffee that they don't stock.

    Sorry to say, but everyone you deal with an any supply chain has limitations or road blocks of some sort.
     
    Lindsay_W, wylie and Never giveup like this.