Forums / Getting Technical / Finance / Mortgage Broker Fees

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  • Profile photo of blackhotelblackhotel
    Participant
    @blackhotel
    Join Date: 2010
    Post Count: 139

    Hi,
    Just wondering about my mortgage broker asking for a fee to be paid. I sat with him for a few hours sorting out a very complex set of circumstances. I have now rec’d copies of all the forms that we talked about for signing. But at this time I have received an invoice from him if I want to proceed with the application process. Is this normal?

    Profile photo of Redom SyedRedom Syed
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    @redom
    Join Date: 2014
    Post Count: 18

    Its not that normal, but does happen depending on the situation. If he’s likely to be clawed back he may charge a fee for service (ie if your developing to sell in short periods).

    Redom Syed | Confidence Finance
    http://www.confidencefinance.com.au/
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    Home Loan Specialists based in Sydney, serving clients Oz wide.

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Not hugely normal, I do know a couple brokers who do charge a fee for service.

    We’ve never charged any fee’s to clients in providing our services, nor intend to anytime in the future.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Some brokers charge an upfront fee for service – I wouldn’t say it’s quite the norm (I don’t) but if it is going to be charge – it needs to be disclosed upfront.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    Was fee charge disclosed up front ?

    Ask your broker what is the fee charge for ?

    How complex is your financial situation ?
    All I know is if you are dealing with investment banking area of finance, you are expecting to pay consultation fee. ( I am talking about big time investors, high net worth investors)
    however, this is not normal for retail or small investor.

    TaylorChang | Finance Broker
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    Home loan | Commercial loan | 0414 691 517

    Profile photo of RedwoodRedwood
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    @redwood
    Join Date: 2013
    Post Count: 340

    I would have no issue with this – if the fee is disclosed up front. i.e a broker will send a fact find and as part of that may state a fixed fee of $500 per loan for instance.

    Its amazing how many people dont know that brokers get paid by banks and even more amazing is the amount of brokers that donot disclose their commission.

    I guess in the end, if you happy with the service then go ahead, if not get a second opinion.

    Cheers Ivan

    Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
    http://redwoodadvisory.com.au
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    SMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,173

    When I remember to I tell potential clients that there is a fee of $550 if they don’t go ahead. I get many people who want to talk to me about structuring and sneak in free legal advice, when coming to me as a broker, and then sometimes I never hear from them again.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
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    The quote and proposal is a good development as you will see what the broker receives from the lender and also their fees if any at the outset. Often the broker will discuss fees, commissions and clawback (the fact that the bank simply takes back the commission if the loan is discharged within certain time periods) as part of the initial conversations and then develop this more if the customer moves toward application. I don’t charge fees but in certain circumstances I think it is entirely reasonable if brokers do. Most of the brokers on this forum have property investment experience that is far outside the scope of the general broking population. Some brokers don’t invest and some don’t own homes and never have (true).

    That does not mean they are not or could not be good or even great. Although, I doubt you would get the passion and experience that you need from a non investor. When it comes to fees I think it has to represent value to you. For example, Stuart has an invitation only brokerage and then others such as Terry have multiple qualifications while Richard has many years of investment experience (much of it in niche and complex areas) to marry with his service. With this type of person there will be service overlaps where the value you receive would will be far above the broking transaction itself (there are others on forum that offer other complimentary and additional skills as well so sorry to those I have not mentioned this time). A fee would be entirely reasonable when you are receiving this additional added value.

    • This reply was modified 4 years, 8 months ago by Profile photo of Don Nicolussi Don Nicolussi.

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
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    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of PLCPLC
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    @plc
    Join Date: 2012
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    You should have received a quote from the broker upfront advising their fees to you. If not, then what they are doing in charging you contravenes the NCCP Act.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
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    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    Tom of course that assumes the loan is a residential loan in a personal name otherwise NCCP does not apply.

    A complicated deal could well be a Company loan or Development deal or similar.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of ElisaMTElisaMT
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    @elisamt
    Join Date: 2015
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    It is not overly common however brokers that deal with very complex structures where there are trusts, company or developments and so forth often do, mainly because you can spend many hours structuring a deal or a plan, packaging the loan or loans only to have the client change their mind and you have then wasted that time from a business perspective.

    When you think about it they are professionals the same as your accountant or financial planner and you don’t expect them to work for free.

    Having said that we do not currently charge a fee as a large portion of our clients come through referrals and so are less likely to be “tire kicking”.

    Talk to your broker, and if you feel the fee fits the service consider it an investment.

    Best of luck!

    ElisaMT | Awesome Lending Solutions
    http://www.awesomelendingsolutions.com.au

    Tailored solutions that build wealth through property

    Profile photo of RedwoodRedwood
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    @redwood
    Join Date: 2013
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    When I remember to I tell potential clients that there is a fee of $550 if they don’t go ahead. I get many people who want to talk to me about structuring and sneak in free legal advice, when coming to me as a broker, and then sometimes I never hear from them again.

    Terry no hard feelings mate – i’ll always talk to you – you’ll hear from me again.

    Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
    http://redwoodadvisory.com.au
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    SMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    moving to fee consultation seems like a great idea :)

    Profile photo of Corey BattCorey Batt
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    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    moving to fee consultation seems like a great idea :)

    If the industry moved to fee consult over commission system, net result would likely be a reduction in people using brokers services in favour of direct to branch.

    This would result in a reduction in competition on rates and products.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    doesn’t financial planners get commission as well as service fees?

    how about say the minimum engagement fee be $1k, to reduce tire kickers wasting broker’s time?
    for this engagement fee, the broker has to specify the services involved and provide the deliverables as set out in the agreement to the client within say five days.

    anyways, what is the going rate for developing a business plan for a client? I’d be interest to offer this specialised service. a good business plan takes months to put together. the service fee could be an upfront engagement fee plus a percentage of the loan amount settled.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
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    how about say the minimum engagement fee be $1k, to reduce tire kickers wasting broker’s time?
    for this engagement fee, the broker has to specify the services involved and provide the deliverables as set out in the agreement to the client within say five days.

    Some brokers do charge an upfront fee that’s rebated upon them being paid a commission from a lender.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

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