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Why use a mortgage Broker?

By Advertising Feature - 23 October 2010 33

[First filed: Oct 18, 2010 @ 9:40]

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This is a question that Rachael Hunter of Dominion Finance gets asked a lot. Its usually followed up with a “Why not just go to a bank directly?” or a “How much are you going to cost me?” and occasionally an “aren’t you going to recommend the lender who you get the best commission from?”

Rachael tells us that these are all fair questions. After all, average joe applies for a loan once every 4-5 years, and even less for a home loan; so mortgage financing is not something that comes up often. Knowing the answers to these and other questions that arise in seeking Mortgage finance is that the greatest value add Rachael can offer. Home loan lending is her core business and it is something that she does every day.

How does that benefit you?

The main benefits are that it saves you time, money and stress. You will not only have someone else finding and researching the best loan for your situation but Rachael will even take care of filling in the paperwork for you and therefore freeing up your time, which is much better spent finding the right house or picking new furniture. Rachael also liaises with the loan assessor and will advocate on your behalf to get your loan approved. Her aim is to limit the amount of time and energy you have to expend to get the lending you want done.

Rachael’s client is you and she work for you not the banks. She keeps an active eye on the lending market for good deals or a new product or price that will suit your needs and is quick to share that with you, even if it does not come from the bank you are currently lending with.

In order for Rachael to keep her clients and retain them over the long term she create relationships that are all about meeting the client’s needs. Going directly to the banks will not offer you the same kind of benefits, in that once they have won your business it is not as necessary for them to keep earning it from you. More importantly, do you really have the time to approach 20 or 30 lending institutions to find the best deal?

Rachael aims to establish and maintain relationships with her clients that last for their entire lending future. She’s also able to draw on extensive resources to provide you with a wealth of knowledge on how to structure lending, which banks are best at your meeting your needs and will cater to your situation, and which products will meet your requirements.

Rachael has kindly offered to answer any questions or comments related to home financing from the RiotACT audience over the coming week and hopefully give you some further insight into why working with her to find a home loan is of benefit to you.

What’s Your opinion?


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33 Responses to
Why use a mortgage Broker?
Len23 10:11 pm 19 Oct 10

My husband and I have been dealing with Rachael for about two years now and the service she has provided is beyond compare. I take the opportunity to recommend her every chance I get – which is why I am posting now. When it comes to the question ‘Why use a mortgage broker?’ I can give many reasons as to why Rachael’s services have improved my experience when securing a mortgage.
1. As I am a self-employed mother, she has been flexible in working to my schedule
2. Rachael has taken the time to understand our (changing) needs and sources a lender and product that suits us – she will also take the time to explain her reasons for this so I know the hard work has been done and I don’t have to spend hours I don’t have researching loans.
3. Rachael is with us for the long run – she is not just interested in finding a loan for right now, but assisting us with long term goals

I could say more, but I think you get the point – A good mortgage broker will save you time, effort and money and will not cost a cent

Keep it up Rachael!

The Chairman 9:32 pm 19 Oct 10

Hi again Rachael,

My name is Andrew and Rachael helped me get a loan to purchase a house in Kaleen a 2 years ago. It is not usual for me to rave about service but she was so great that I recomended to her many of my friends from work. I know of at least 5 other people Rachael has done loans for who have been extremly happy with her profesionalism. She always made us feel like we were clients rather than a loan or commision waiting to happen. There was no pressure at all which I found so much better than the 2 loan officers we saw from CBA and ANZ. We are now looking to purchase another property and I am SO glad I stumbled on this thread as Rachael will be th 1st person I call.

Cheers again Rachael, love your work (and so do at least 5 other people I know!)

Rachael Hunter 4:05 pm 19 Oct 10

Hi Weekend Golfer.

I find that different people have different needs. Couples with children tend to prefer for me to visit them on a week night at their home around 7.00 -7.30pm. Many busy professionals like to use email for allot of the communication and they either visit me at the office in Deakin at lunchtime or I meet them at a Cafe near their workplace. I am a “mobile lender” so in the true essence of the word I am mobile.

Hope this answers the question

Rachael Hunter 3:57 pm 19 Oct 10

I apologise, my mistake. You are correct and I should have put more thought into the innitial response, typed it in a hurry, still no excuse. I was $12.27 out and that must be why my BAS is such a nightmare!

My aim was to give you an idea of the commission structure and how it operates.

Weekend Golfer 3:57 pm 19 Oct 10

Rachael, I have had issues with the banks for a number of years. Being treated like a number rather than a person buying my largest investment ever. As a mortgage broker, do I come to you or can you come and see me and my wife at a time that suits us (within reason of course)

colourful sydney rac 3:52 pm 19 Oct 10

Rachael Hunter said :

If I were writing a Suncorp loan of $300,000 I would recieve .45% commission. So I would get $1,350. From that I pay GST. So give $135 to the tax man. so I recieve $1,215 which I then have to take tax, super, insurances, advertising etc out of.

If the same loan where a ANZ loan I would perhaps recieve $1,650.00 gst inclusive, as they pay .55% commission.

I don’t think it is worth going through each of the banks commission splits. They range from .45% to .6% depending on your loan volumes and your conversion rate and the banks commission structure.

Hope that answers the question

Thanks Rachel – this is all really helpful.

Lazy I 3:51 pm 19 Oct 10

Rachael Hunter said :

So I would get $1,350. From that I pay GST. So give $135 to the tax man. so I recieve $1,215.

Surely the GST portion of $1350 be $122.72, leaving $1227.27.

$1227.27 + 10% GST ($122.72) = 1349.99 (1 cent off due to rounding).

Rachael Hunter 3:06 pm 19 Oct 10

If I were writing a Suncorp loan of $300,000 I would recieve .45% commission. So I would get $1,350. From that I pay GST. So give $135 to the tax man. so I recieve $1,215 which I then have to take tax, super, insurances, advertising etc out of.

If the same loan where a ANZ loan I would perhaps recieve $1,650.00 gst inclusive, as they pay .55% commission.

I don’t think it is worth going through each of the banks commission splits. They range from .45% to .6% depending on your loan volumes and your conversion rate and the banks commission structure.

Hope that answers the question

wycx 11:41 am 19 Oct 10

…the good brokers I know would not hesitate to be as transparent as possible to ensure you felt comfortable with the product chosen.

Would you be willing to share with RiotAct readers the commissions offered to you by the various lenders? Some of us are curious.

Rachael Hunter 7:32 am 19 Oct 10

It should be identical and the banks assure us that what we can offer is identical. Under the new ASIC laws a broker is required to disclose to you hisor her commission and you actually sign off To say you have been shown it and understand it, and the good brokers I know would not hesitate to be as transparent as possible to ensure you felt comfortable with the product chosen.

The loan comparison calculators we use match the products on the price and the requirements such as loan to value ratios, Loan Mortgage Insurance costs. Amount of income, amount of dependendants, serviceability,etc… not on the commission cut.

I-filed 6:52 pm 18 Oct 10

“should be” identical? Or you guarantee that it is identical? How is transparency ensured?

Rachael Hunter 5:12 pm 18 Oct 10

No the commission amount varies depending on the lender and the quality of my submissions and the volumes that I write. The commission is only paid to the broker once the loan is settled and therefore just getting advice from a broker, or submitting an application does not mean a broker will be paid.

colourful sydney rac 4:07 pm 18 Oct 10

Do you get the same commission irrespective of the lending institution?

Rachael Hunter 3:52 pm 18 Oct 10

We are called “introducers” by the banks so we are paid a commission by the banks to introduce business to them. The rate you would get going directly to the bank should be identical to the rate we can offer.

The difference is that we are “clawed back” or forced to repay our comission if a client leaves the bank we have introduced them to in the first 24 months. This means that all times I will aim to fit the best bank and the best product to the clients needs to make sure you are happy and don’t move banks.

At present most brokers do not charge a fee for service. As our licencing requirements change, this may change to. Not the case at present though.

At the moment the bank pays us and the service does not cost you

Hope this answers your question

pierce 1:57 pm 18 Oct 10

So, just to be clear – do you get any kind of commission (or payment by another name) from the supplier of the mortgage? Or do you make your money from the client for fees for the service?

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