Browse Forums Home Finance Re: Do I really need a broker? 61Jun 25, 2009 7:03 pm There are benefits to using a broker and benefits to dealing directly with the bank. Obviously the benefits of using a broker is that they are able to compare loans from various institutions and present you with a shortlist of options for you to decide which loan suits you best. Unfortunately, sometimes the broker presents the loans that pay him a higher commission and not neccessarily best suited to the needs of the applicant. For example, with some institutions eg: Suncorp, brokers get paid less on their Asset Line product (Line of credit) than they do on the term loans - so even if the Asset line was more suitable, some brokers wouldn't even mention it to their applicants as they only get paid 70% of the commission as they would on a different type of loan. My main concern with brokers, is that these days, anyone can become a broker. One day somebody will be a plumber, or a chef - eventually get sick of that, do a 3 day course, a short exam and all of a sudden they're a 'mortgage broker' and know jack about financial services. How would you like somebody who has been in financial services for 5 minutes and had no training what so ever, dealing with your finances? Banks have intense training for their lenders. Managers are required to overview the loan process for all of their new lenders from sitting in on the initial interview right through until settlement to ensure the clients best interests are being looked after. Dealing directly with the bank means you have a relationship with someone who can get things done for you. Once the loan is settled, brokers are unable to provide the service a bank lender can. If you have maintenance/service enquiries, the broker will tell you to call the banks call center... so you sit on hold for 30 minutes trying to get something very simple done. With most bank lenders, you will be able to call your finance manager directly & resolve the problem with somebody who already knows and understands your circumstances. These days, banks are very focussed on catering for all of your needs.. not just lending. Sure, a broker can do the research for your loan.. but what about house insurance? life insurance? income protection? credit cards? transactional accounts? Super? ... you still have to do all the running around for that. Bank lenders are trained to spend the time with you to discuss ALL of your needs and arrange EVERYTHING for you.. from simple savings accounts, loans to setting up a personalised income protection policy to ensure that no matter what happens to you, that you will always be on track to reach your financial goals. Most banks will have packages to reward you for having all of your business with them with discounts on interest rates, fees, insurance etc.. sometimes the savings can be quite significant. I guess, the main downside to dealing directly with a bank is that they are limited to the products they offer. To solve this?? Purchase a copy of Money Magazine and have a read of which banks have the best rated products... can't go wrong I guess? Cheers, Re: Do I really need a broker? 62Jun 26, 2009 2:35 am I'm very happy with my broker. And I would be totally lost without her, having no experience myself with bank lending practices. At this stage she has managed to get me in touch with four internal ANZ staff, so I'm able to send an email for pretty much any query I have, rather than waiting on a phone line. So I am one of the lucky ones to find a good broker If you want a recommendation, send me a PM. The funny thing is I actually called my current bank (CBA) 3 or 4 times, as well as filling in their home loan enquiry form twice, and they still haven't called me back months later. Sure I am in Singapore, but they could at least have forwarded my details to the appropriate person. I actually NEVER spoke to a real person who dealt with home loans at CBA, just their front line staff who forwarded me to the home loan number which said they valued my call, but not enough to actually answer it. So I have no qualms about taking the loan from another bank. Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover Re: Do I really need a broker? 63Jun 27, 2009 4:13 pm yes, i think most first home buyers should use a broker. i work in the financial planning industry and in the past have been a broker only as an add on service, we now have one who consults to our clients and he is fantastic. Recent examples of people whi could have trouble with loans such as genuine savings, cash wages and a whole raft of other stuff isnt too much trouble and the results speak for themselves. Hes currently doing my loan for me and im a finance professional still with my broking accreditation. If you use a broker make sure their experienced/dont agree to a fee if you dont proceed/ dont apply with different brokers as it wastes everyones time and be prepared to refer/get referrals. Re: Do I really need a broker? 64Jun 27, 2009 5:53 pm My first mortgage - we used a broker who, at the time, we were happy with, but as it progressed, we realised we'd been screwed over for the product that gave him the best commission. We asked for a loan where we could pay extra off the principal - sure we could, as long as we accepted a penalty fee! We were also locked in for 5 years, with early-break fees, that we were not told about - even though we asked for a loan without those fees - our plans were to pay as much as possible early on, and move on to something bigger & better before the 5 years were up. Funny how that broker seemed to disappear a couple of years after we took that mortgage. 2nd mortgage that we went for, I chose initially to use a broker - they can't be all bad right? First broker was Mr Smoooooth - too smooth. I caught him out a few times, and he talked his way around it. When his pressure sales-pitch wasn't working, he played the 'I drove 50km here in peak hour traffic to give you the best deal' card. Funny thing was, he'd told us at the beginning he only had an hour as he was seeing 2 more people in the local area. I reminded him of that & he * his way around it again. 2nd broker basically gathered our info, dropped a page in front of us & said 'sign here' - he couldn't even tell us who the lender would be. I refused to sign the page, as the top half was cleverly covered up. I told him to leave & not come back. He tried the whole "you have to pay for my travelling costs if you don't take out the mortgage with us" and even sent us a letter of demand in the post a few weeks later. He's still waiting...... Those 2 incidents, plus the first mortgage, scared me off brokers - so we organised that mortgage ourselves through the credit union, after comparing 6 major lenders. Yes, it was hard work to gather all the information, and keep up with changes prior to submitting the application. Then we decided to buy another place, using the very healthy equity we had in the existing house. Had a few issues dealing direct with the financial institutions, as we wanted to draw out as much equity as possible, and have a low mortgage on the new place. After being given the run-around by major lenders, I ended up resigning myself to the fact that we'd need a broker to sort it all out. Found a good one, recommended by a friend who had used this broker twice. Still wary of the previous incidents, I was very cautious, and checked everything he said about the various options & lenders. He was absolutely 100% spot on, and got the mortgages sorted with the lender who I had initially chosen as having the best product for us. He changed my opinion of brokers, and I would happily engage his services again. The best advice I can give is to use a broker, but also do some independant comparisons of your own with various lenders - even just for your own piece of mind. The benefit here is that you'll feel even more comfortable when your results match those of your broker, and the trust will develop. You'll also be better armed to spot a not-so-honest broker. I wish I had done that 15 years ago - we could have saved thousands. west sydney mortgage broker 65Jun 29, 2009 10:06 pm I respect borrowers making their own choice to use either a bank representative or a mortgage broker such as a Certified Mortgage Consultant to look after their finance needs but no one can deny the increasing popularity of mortgage brokers in Australia amongst the general public. Customers circumstances and lending policies are so fluid and changeable that brokers provide ongoing support to customers literally 7 days a week. I have lost count of how many times lenders policy changes left customers out in the cold in the last 8 months, contacting customers late at night and on the weekends advising them of pending changes so that they are not disadvantaged by rising interest rates, lower discounts or caps to lending ratios. There has always been one constant in the equation during this time; dependable service from a mortgage broker showing the way. You can't put a value on that level of professional relationship to get things done for you and in a proactive manner. Once the loan is settled, customers call the broker when lenders make mistakes. Two weeks ago when my customers' lender placed an unauthorised $2000 charge on one of their accounts, they chose to call the broker who contacted key people to refund the amount. If you have loan maintenance and service enquiries, the broker acts as the circuit breaker who cuts through the noise and gets the results as an advocate. Often due to career mobility amongst lender staff, customers turn to a broker to get personal service as they are unable to reach the person (in house staff) who started the process for them in the first place. The mortgage broker not only does the research for your loan based on your requirements but also does offer life insurance, home and contents insurance, income protection insurance, credit cards, term deposits and transactional accounts, all using the same distribution methods bank staff use. Re: Do I really need a broker? 66Jun 29, 2009 10:17 pm Our broker spent 19 yrs with a big bank, now a broker. He has helped us several times, also daughter 3 times. Is available 7 days via a phone/email. Would never go to a bank now. Where you are coming from is where you are going to... Re: Do I really need a broker? 67Jul 15, 2009 3:48 pm onc_artisan Our broker spent 19 yrs with a big bank, now a broker. He has helped us several times, also daughter 3 times. Is available 7 days via a phone/email. Would never go to a bank now. Good to hear the benefits are evident to borrowers. Re: Do I really need a broker? 68Jul 15, 2009 3:55 pm I would be lost without our mortgage broker, he has been absolutley brilliant. From his initial advice, through to dealing with our builder and land developer on our behalf, he has been very thorough and communicative. So far it has been a stress free process! New beginnings. Re: Do I really need a broker? 69Jul 15, 2009 4:41 pm We too have been very happy with our current mortgage broker. I had an experience with a broker about 8 years ago that was less than good where the bank blamed the broker and the broker blamed the bank. I then swore that I would never go back to a broker. The current broker I have now is completely different. He managed to get me a better rate than a senior mortgage manager at the bank. He was easier to get ahold of and came to my office for meetings (although he is always late.) We are settling next week and when we told him that we would be away in the Mountains he didn't blink an eye and then just said "I suppose I'll have to drive up the mountain to get the documents signed if the bank holds things up." The banks must be paying too much in trailing commissions for that kind of service..... View our blog at: http://room4acubby.blogspot.com/ Re: Do I really need a broker? 70Jul 16, 2009 12:44 am Are you suggesting the senior mortgage manager at the bank doesn't get paid as much?? I think your broker values your custom too much to worry about the trip up the mountains. Re: Do I really need a broker? 71Aug 12, 2009 1:12 am Hi room4acubby, just something I learnt last week when a head hunter called me to offer a lending manager job at a bank. For a lending manager the bank offers; *$80,000 p.a. base salary *Superannuation *Performance Bonuses to double the base salary *Fully maintained car with private usage allowed *... I didn't bother to find out the rest Re: Do I really need a broker? 72Aug 31, 2009 6:46 pm We used a mortgage broker - we had a very clear idea of what we wanted in a home loan, and there were a number of options which our broker came up with which we may not have found ourselves. We did do our own research as well, but it was just much easier having it all laid out and being able to ask questions about particular home loans. My partner and I both work full-time, so having someone else do the legwork, especially once we'd decided which loan to apply for, was a blessing. Also, bank loan documents are a trial to go through, and not having to read through five or six different sets of terms and conditions and draw up comparison charts on fees etc was a relief. It really depends on 1) who you get, and 2) how much time you have. If you have lots of time, and you're worried about getting a dud broker, it may be worth doing it yourself. But we got a loan with the features we were after and a great interest rate, all for the price of sitting down with a broker for a couple of meetings. Cheers Indigo Re: Do I really need a broker? 73Aug 31, 2009 11:30 pm For my previous three homes i arrangd for the loans myself... countless trips to the bank... waiting waiting waiting... but everything sorted in the end. As i'm now building for the first time, it was recommended that i use a broker. I had a good and bad experience LOL (although not as bad as some, mainly just annoying). He was great, he came to me and went through every single little detail. I told him what i wanted (and i had done my research beforehand so i wasn't going to sign for anything less) however... he said that he could get me an even better rate, still with all the features that i wanted. So after going over everything, i signed! Very very easy and pleasant experience. But then i had to wait two months before i heard anything back from him!! Luckily that call was to say *congratulations*. I'm of two minds as to whether i'd recommend a broker again. I can see their benifits (saved me HEAPS of time in not having to run around and take time off work), but then i also like a bit of communication!! viewtopic.php?f=31&t=22766 - my build thread! Time waits for no man. Unless that man is Chuck Norris. Re: Do I really need a broker? 74Sep 01, 2009 12:35 pm My partner and I had this discussion a few months back when we decided that buying was actually a feasible option for us. I knew I was going to be inheriting a sum of money that would be sufficient for a deposit so we went and talked to our current banks. I bank with Westpac so I went in and had a chat. Explained about my inheritance that would be coming through, and how much approx we wanted to borrow. they didn't want to know me because it wasn't "genuine savings". Partner went to Nab and Commonwealth - explained it all... same deal. Wasn't genuine savings so they told us to come back in 3 months when we had a savings history. 3 months? Get stuffed ! We want a house now! lol Went to the broker that did our business finance.. He went through CBA and suddenly the "genuine savings" wasn't an issue anymore. And hey presto (well a month later) we had our loan. Other issue was the timing. He submitted the application and kept hearing nothing. He called.. it got escalated, still nothing. Called again and so on. Ended up being put on the desk of the State Manager of the CBA to look at. Finally got an answer. If we had been going direct through the bank - I highly doubt we could have got it escalated that high. A full month later we finally got our unconditional approval. In the nick of time to adhere to the land contract finance clause The day I went to pull my 40k out of my Westpac account, they asked what it was for. I told them it was for a home loan with CBA and they did their spiel about why I should have talked to them first. Said "Well I did and apparently you didnt want my money because I didnt save it myself" - "oh." haha So our vote is to go with a broker! which mortgage broker? 75Sep 02, 2009 5:21 pm [JADED] So our vote is to go with a broker! Another strong endorsement for using a qualified and professional mortgage broker! Re: Do I really need a broker? 76Sep 09, 2009 1:58 am First, let me say I am not a broker, however work in a similar capacity to one directly for a major bank. As a mortgage Innovation Manager I am not paid a salary by the bank only commission, however the customer can go directly to the bank and get exactly the same deal in a branch.
I can honestly say that after 15 years in this industry, most brokers I have dealt with in the past are professional in their approach with customers. Like all industries, as a lender I hear all the horror stories from borrowers that have been to brokers and have had bad experiences. Likewise for those who have had a tough time with other financial institutions and even the one I work with. For a borrower there is nothing better than doing your own homework before you decide which bank / lender you will go through. Whether or not you directly contact the lender or use a broker, the answer is to be well informed first on the type of product you want, the budget of repayments you have in mind and the terms and conditions of the type of loan you want to obtain. A broker is good for the following: Multiple lenders to choose from, software to match the borrowers requirements. The downside is the ability to keep up with the ever changing requirements and changing legislation and policy the institutions keep implementing. Brokers will need to be licensed Australia wide later this year, which will require mandatory qualifications, some of which are in place already. This will clean up any cowboys in the industry and it will become more of a profession. There are too many part time brokers out there still giving incomplete advice to borrowers. The answer is research, research, research. Generally you don't buy the first house you look at, neither should you buy the first home loan you look at. Not unless you have done the homework, it fits your exact requirements and it is handled professionally by either a broker or a lender.
I really need a broker! 77Sep 09, 2009 11:47 pm Mortgage and Finance Association of Australia (which I am a Full Member) has already expelled 1,500 brokers in September for failing to meet minimum standard for membership a qualification in certificate four in mortgage and finance broking. "If they haven't done the program, there's no evidence that they understand the different considerations they need to take into account in terms of laws relating to finance and mortgage broking, different loan products that are available, how to calculate service requirements and so forth," Phil Naylor, the head of the MFAA, said. Re: Do I really need a broker? 78Sep 10, 2009 9:20 pm Couldn't agree more thlo and so they should. I have had a lot to do with the MFAA myself over the last 15 years or more. Minimum standards for education are mandatory. I have diploma of Mortgage Lending and was on the Queensland State council when they were pushing the diploma course through and I am also a full member myself. 15 years or more of experience helps as well. I object to finance brokers who do not have sufficient qualifications, advising customers on what would be the biggest financial decision of their life. So they should expel members that do not meet industry standards. Re: Do I really need a broker? 79Sep 18, 2009 10:30 am I am currently in the process of buying my first home, at only 22 I am involving the services of a broker from Mortgage Choice, because otherwise I'd have absolutely no friggin idea where to start. He has been fantastic!! He asked all the questions that the banks generally ask, then he puts it all into a computer program and comes up with an answer as to which banks would approve a loan based on the details I gave him. Then we looked closer at the few options I had (not much variety for me because I'm using FHOG and my small amount of genuine savings). Compared the types of loans and their features and decided which one to go for. He rang yesterday to say I was pre approved. Unfortunately the house I wanted the finance for was sold to a cash buyer. But all in a day I found another house that I like, its even better, even cheaper and I've already got pre approval, so its all in the works at the moment. As far as I know cost wise, there is a $700 fee for applying for the particular loan I went for (which I'd pay if I went through the bank directly anyway) and the mortgage choice guy gets paid a commission (from the lender) when I get to settlement date. and no I don't think they can do a deal as such. they just take out all the extra work by doing it all for you. Re: Do I really need a broker? 80Sep 21, 2009 10:03 am Hi all, Firstly sorry to the brokers on here, and also the good ones out there, but after our expirience, I would never ever even go near one again. very interesting thread though, some great points being thrown around, and some not so good.. brokers are like travel agents??? I have never taken a holiday that cost $400000, and dont really think it is the same thing. when we are talking about this much money and the difference between loans and lenders, I think it is important to take the time to do it yourself. most lenders require the same stuff for your approval, so I made a folder of everything that they all ask for as well as a list of things that we important to me from the loan. i'll mention now that i am also 22, so don't think that this is someone that understands a lot about how these things work, but i sure now that a $3000 in repayments each month is more than $2500, what i am getting at here is, it can be a simple list of questions you ask each lender. for example; free redraw? unlimited repayments? early exit fees? Every lender that I went to, I found to be extremely helpful (except for which bank??), an would help me to compare each others loans, some gave me recommendations to other banks with the information that i had compiled for myself. I found that it was actually not to difficult after the first 3/4 banks, I new what I was looking for, said that straight up, an the bankers would then come up with the best deal they could give me. I then sat down with all the info i had, compared apples to apples, all loans had the same features, an chose the best value loan for me. I would strongly suggest you find your loan for yourself, I personally think you can get a better deal, as well as learn as much as possible along the way, that way you know exactly what you have at the end of it. you also know that the loan has actually been processed... also that the correct information has been filled out... the loan is for the right amount... your not waiting on a phone call in 5 mins, 2 weeks later, and that your broker isn't on holidays and wont answer his phone................ do not pay until you are satisfied with workmanship windows require flashing over the head archithrave and up under weatherboards 3 28282 Broker here - legislation says that every true broker must put the clients best interests before theirs so in theory they must offer you the best options for you on their… 2 46013 Thank you so much for the effort. We will use it to talk with builder. We also had idea of building duplex instead and seeking suggest ions. viewtopic.php?f=31&t=106744 11 13843 |