Settling without a broker

I've just bought a property and am in the settlement period, currently working on finalising the finance. One of the big 4s have offered me a deal but on the proviso that it doesn't go through my broker (ie. they don't pay the brokerage commission, trail etc).

Question is, how involved or necessary is the broker in the settlement process and are there extra things I will need to do myself if I go without the broker ?

 

Are you saying that you're working with a broker, and the bank has approached you directly to offer you a better deal if you dump your broker?

If that's the case - tell your broker. It's highly likely they can match the deal and still make sure your deal goes smoothly in the lead up to settlement.

Without a broker, it might be fine - but it's when things don't go fine that you really want them in your corner. They tend to be (WAY) more accessible than your average branch staff member.

Also - which lender?

 

It doesn't really sound fair if the broker has been doing the work to date on the expectation that you will take up the offer he gets for you ... yes, tell the broker.

 

I never used a broker but this sounds highly unethical to me. If someone done work for you, they should be paid for that effort.

 

No details yet, waiting on them to get back to me. I'm just wondering about the general process of settling without a broker. Might not even go through with it and will talk to broker. The broker has a couple of my other loans under their belt, so I don't feel too bad

 

maybe I'm missing something about this being unethical.
We did go through work to get a preapproval loan, but that was rejected after contract was signed, leaving a bit of scrambling to do and have to do whole process again with new lender. Applications have not been submitted yet. So to me, that wasn't job done

 

All of the big 4 banks have consistently told brokers that the offers through the branch are the same as what brokers can obtain for clients. The commissions don't add to the cost of your loan, they replace the cost of paying someone directly employed by the bank, as well as the cost of all the marketing and other support direct sales channels receive.

The unethical part is the person in the branch telling you they can get you a better deal because they don't have to pay commissions, yet they haven't actually told you what they can get for you. On some level, they're simply telling you what they think it takes for them to write the loan, as opposed to the broker whom they consider a competitor.

The broker also has done quite a bit of work and incurred expenses in getting you this far. A pre-approval takes work, figuring out what went wrong and finding an alternate lender takes work. If the branch makes it seem easier, it's probably because they're leveraging the work done by the broker to get this far.

 

no, broker said the bank decided to apply new APRA rules and did a recalc

 

That's a bit odd. The APRA rules are hardly new, but banks calcs do change all the time. They might have used an old calc by accident - if the deal was marginal a tweak to the HEM living expenses can be all it takes to turn a yes into a no.

 

I'm a little confused.

Did you approach the bank directly for this loan? Or did your broker apply for it?

If your broker applied for it - at what point did the bank tell you to cut the broker out?

Cheers

Jamie

 

Which bank ?

 

So many holes in what's happening here.

 

Brokers arent involved at all in the settlement process other than assisting to get to finance approval with the least hurdles. Lawyers and conveyancers attend to settlement.

A broker ensures you find and obtain the best loan and lender and one that suits your specific needs. Most brokers have a wide array of lenders that may or may not suit all borrowers. The broker works FOR YOU. Has the bank mentioned their views on crossed loans ?? Hopefully they didnt offer redraw but offered a free offset instead. What about fees ? Brokers would mention/explain cross loan issues but bank lenders likely see no reason since they dont act FOR YOU. They act for their employer and are probably remunerated or given some incentives based on selling you the worst deal you can accept. (Read the paper about the Royal Commission if you think its not true)
Some lenders are terrific for a first loan and aweful if you plan a later purchase.

You probably need to have the discussion with your broker based on what you have been offered. Its not particulary honest and ethical to get someone to assist you and funck them over by backdooring them. Sure know the market and whats on offer but that too is something yourbroker would know. Deals change daily and brokers keep up with it. You bank lender doesnt have to get you the best deal. The broker can just as likely write that same deal or a lesser rate. They will also explain why it may not be a great offer.

One of the best things a broker does is package you up so you look like a great risk. They know what works and what fails. The bank lender may just hand you the paperwork and tell you to send it back.

 

I think you'd be surprised - as a broker I'm involved in the settlement process until the deal is done. We do a lot of work to co-ordinate banks, lawyers and buyers, and make sure all the funds are in the right places at the right times.

I learned very early on that formal approval far from job done - it's more like half way.

 

Brokers handle credit. Solicitors handle conveyance. They cannot do each other's job. Its like suggesting you only need a mortgage broker... illegal in every state.

Mortgage brokers may handle hickups but to suggest they handle conveyance is false.

 

well, my experience is that when a broker is keeping an eye on these things, the settlement goes much smoother, lots of mistakes can happen without a hands on and responsible broker.