Hey guys I wanted to know is it normal for a mortgage broker to charge a fee. I was speaking to a broker and he said something about costs and charges for pre approval form because they take a long process to do or something? The guy was a bit of a salesmen, I told him I only wanted to borrow this X amount and he keep trying to push it to Y amount.
I don't know so I wanted to ask is this normal ? , is there usually any fee involved ? what should I look out for ?
I have another question, my partner and I want to purchase a first home she is from Singapore can we both put our names on the house even thought she is a foreign citizen?
Thank You
Yes it is normal these days. But I don't charge anything at the moment. I have been meaning to implement something to stop the time wasters but haven't got around to it – not that I get many.
You need to look at the foreign investment rules if your Singaporean friend is a non permanent resident. Depends on her/his visa.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Like Terry I don't charge a fee, but I do know of some brokers out there who will charge for pre-approvals (who will then waive the fee if in the end you take out the loan through them).
As Terry said the way your partner is treated (non-resident, temp visa, etc) will affect whether approval from FIRB is needed, type of property you can buy and the maximum LVR that will be allowed by lenders.
Cheers
Tom
I also don't charge a fee – but it's becoming more common these days.
If you don't feel comfortable with the MB you're dealing with then talk with another one. Trust is important.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I do know of a few brokerages which charge a fee for service like you've mentioned.
Other fee's a broker may charge can include a fee for service if the loan amount is below a certain amount (ie, $100k), or clawback provisions (if the loan is discharged in less than two years, the brokers commission may be charged to the client).
The most important thing to do is to find a broker you can trust and engage with – as well as one which helps you achieve your goals than drag behind.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Must admit like the others have mentioned fees are becoming more common in the industry but i for one don't charge on residential deals.
Had one into today from a forum member for 85K and felt like charging but they are starting their portfolio and i remember when iw as in the same position.
If he still wants to charge for a pre-approval / full application take your business elsewhere.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You guys are very helpful, good on you.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
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hank you so much guys , I spoke to a broker today and asked him to explain to me what the comparison rate and the difference to standard variable?? He could not really give me a answer and said don't worry so much about the comparison rate. Should I be worried ? is this a worry ??
Thanks Guys
Hiya
The comparison rates gives you a better idea of the true cost of the loan. It factors in the rate, fees, charges, etc.
Sounds like you're not too comfortable in dealing with your current broker. Trust is key – if you don't feel you have it, then perhaps look for another.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Like Jamie said a comparison rate allows you to gauge the truer interest rate after taking into account other costs associated with the loan. So a loan with no or minimal fees & costs will have a comparison rate close to the advertised interest rate while a loan with higher fees, costs will have a comparison rate much higher than the advertised rate.
It may not have a major effect on the best product suitable for your needs, but I thought the broker should have at least known what it incorporated.
Cheers
Tom
Good be worried I would run a mile….
If they can't answer a basic question like this imagine how they will go when you get into sophisticated loan structuring question as your portfolio expands.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
haha thanks guys for all the informative advice.
so for example anz standard variable is 5.08% and comparison is 5.43% ongoing fee $375 annually does that mean the life of the loan will be 5.43% or that just the upfront fees would be extra 0.35% ??
is the comparison rate basically just including the upfront fees or annual fees for example standard 5.16% and upfront fee is $375 with no ongoing fee which the comparison rate would be 5.19% because including the upfront fee …. is that how it works??
would it be the best option to find a loan with standard variable and comparison rate that are the same ???? i have seen a comparison rate lower than the standard variable as well which I do not understand??
sorry if this question sounds stupid
Hiya
I'd just compare apples with apples. A loan under the b/free package is pretty straight forward – there's a nil app fee and an ongoing annual fee of $375.
Most lenders offering these sort of pro packs have similar fee structures – a nil (or low) app fee followed by an annual fee of around $350 to $395.
Look at a few different options and have your broker explain the pros/cons of each in regards to your circumstances.
it sounds like you're getting caught up too much in thinking about this comparison rate.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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