21 September 2021

Why use a mortgage Broker?

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[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.

READ ALSO The best mortgage brokers in Canberra

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?

READ ALSO The best home loan providers in Canberra

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.

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I don’t know Rachael and I’ve never dealt with Dominion Finance but I have to say I thoroughly recommend using a mortgage broker.

Instead of dealing with the unhelpful and inflexible drones with no decision-making ability at the bank, you are dealing with normal human beings who listen to what you want and help you assess the range of options. And then they go off and suffer the pain of most of the dealing with the bank.

And best of all, it not only won’t cost a cent, but you are far more likely to get a better deal than if you did the deal your self.

Rachael is a gem. I was introduced to her through a work colleague. I told her exactly what I needed and she gave me a few options to choose from. Rachael knows the bank products well, was able to answer all of my questions (and believe me – there were quite a few!) and I was then able to choose the right loan for me. She was completely unbiased and after going through a major life change I can honestly say that I don’t think I could have done it all so quickly without her. She was relentless and followed the whole loan process through for me and did everything so quickly. I have been, and I will be, recommending her to anyone I hear about needing a loan. Thank you Rachael!

Weekend Golfer8:06 am 27 Oct 10

Just wanted to say thank you to Rachael. I contacted and met her last week about refinancing. She was able to meet me and my wife and explain the whole process. Long story short, she was able to source the best deal for our situation.

Thanks Rachael, you’ve been a wealth of knowledge!!!!

georgesgenitals9:31 am 26 Oct 10

Rachael Hunter said :

Thanks for the votes of confidence. I was a bit nervous at first as I know brokers don’t always have a good reputation, but I wanted to be helpful and trasparent and also wanted to have an understanding of the communities perspective and questions

I appreciate all the questions and feedback and am more than happy to assist any one who has questions

Regards
Rachael

Most mortgage brokers are fine – it’s the Real Estate Agents we’ve learned to watch out for!

Rachael Hunter12:24 pm 25 Oct 10

Thanks for the votes of confidence. I was a bit nervous at first as I know brokers don’t always have a good reputation, but I wanted to be helpful and trasparent and also wanted to have an understanding of the communities perspective and questions

I appreciate all the questions and feedback and am more than happy to assist any one who has questions

Regards
Rachael

georgesgenitals6:02 pm 24 Oct 10

grumpyrhonda said :

dvaey said :

Id just like to throw in my 2c that its great to see an advertising feature on RA, where the advertiser is prepared to accept comments and feedback, and answer users questions. Too many advertising features leave users with questions, but arent interested in our comments.

Summed it up perfectly dvaey!

Agreed. And especially for a service that many people don’t really understand, but should.

grumpyrhonda11:54 am 24 Oct 10

dvaey said :

Id just like to throw in my 2c that its great to see an advertising feature on RA, where the advertiser is prepared to accept comments and feedback, and answer users questions. Too many advertising features leave users with questions, but arent interested in our comments.

Summed it up perfectly dvaey!

Id just like to throw in my 2c that its great to see an advertising feature on RA, where the advertiser is prepared to accept comments and feedback, and answer users questions. Too many advertising features leave users with questions, but arent interested in our comments.

georgesgenitals11:50 pm 23 Oct 10

2604 said :

I’d be interested to know how many of the “property investment” regulars on RA (VY, George’s Genitals, and anyone else who contributes regularly when we discuss the topic) use a mortgage broker and how many seek out the best deal for themselves. Also interested to know why you choose to DIY or go through a broker.

No Newbies please.

I started out using mortgage brokers. I used one guy a couple of times, and found him great (he was with Aussie Home Loans), then used an independent (ok experience, but not great), then found a guy in my bank with enough delegation to authorise the deals I wanted on the spot, and have used him ever since. Trouble is, he is now too busy and has become unresponsive, so next time I’ll need to find someone else. Fortunately I’m now at the point where I have enough business that the banks actually want to deal with me (at last).

Mortgage brokers are typically pretty good to deal with, provided they communicate regularly with all the parties involved and understand the value of deadlines. I’ve got no problems with them making a commission provided they do as instructed. I’ve dealt with one mortgage broker who was clearly trying to scam me, but this was very obvious and so I just ignored his calls after our first meeting, and then he left me alone.

The trick is to talk with your mortgage broker about what it is (you think) you want. You need to give serious thought to things like flexibility as well as simply ‘cheapest’. Life happens and things change, and that dirt cheap but inflexible mortgage with an obscure provider can become a real chain around your neck.

Of course, you need to augment your ‘team’ with a good accountant and a good lawyer, especially if you want to invest. Ask your mortgage broker – if they have other people they know and work well with it can make the entire deal a lot easier.

In conclusion, mortgage brokers are a great resource for people who don’t want the hassle and angst of dealing direct with banks (which can be considerable). Ask around for references from your friends or online, and give the most promising lead a phone call. I’ve never dealt with Rachael from this thread, but given her responses to the questions I’d certainly be willing to have a chat to her.

Hi all,

I highly recommend using Rachael if you are after a mortgage broker!

Last year I decided that it was time to buy my first home. Rachael came to my house at a time that was convenient for me and took the time to explain every step of the process in minute detail. Given I had previously known nothing about buying property, this was extremely beneficial for me and exactly what I needed (I had so many questions that our first meeting went for 3 hours). She even took the time to give me tips on things to look for and questions to ask when viewing properties.

Rachael completed all of the necessary paperwork for me and kept me informed of progress at all times. When I finally found a property and put in an offer, Rachael came along to the pre-exchange inspection with me.

I could not have gotten through the whole process without Rachael – she was a god-send!

If you’re thinking of buying a house, then do yourself a favour and contact Rachael. You won’t regret it!

Rachael Hunter12:28 pm 22 Oct 10

Creative Canberran, I totally agree with you. I believe that if a client has a good accountant, financial planner and/ or a lawyer then they are in a position to make well informed and educated choices. This is the advice I would give any client. Buying a home or investment property is one of the biggest investment most people will make.

It should be taken seriously and be well researched

creative_canberran12:54 am 22 Oct 10

I would like to point out two things.
Firstly, commissions are everywhere. Where someone claims not to work on commission, it’s likely they still work on spivs (target bonuses). Sometimes, people receive both. This goes for anyone who sells anything. So long as there is an admission of this, I don’t see a problem.

I would however caution people to always retain a 3rd party for advice. A mortgage broker is providing a commercial service and regardless of claims is working for the good of their business. Having a lawyer or financial advisor separate to the broker would always be advisable, particularly in assessing any contract with the bank for which a mortgage broker is legally bound not to offer legal advice on.

Rachael Hunter8:31 pm 21 Oct 10

Hey Jazz. I appreciate the dialogue and the feedback. I understand better the attraction of this medium of communication after having to monitor and contribute this week

I think it the problems you mentioned you had experienced with brokers would be related to their skill level and experience.

I have dealt with a number of companies and trusts now and have also had multiple clients on the same loan application and title and 2nd mortgages for guarantorship. Off the plan purchases, owner builder loans, business refinances, and construction loans etc.

To be honest the first time I did panic. Now it is not so hard.

Like any industry there are good , skilled brokers and not so ethical, honest or reliable brokers. The new ASIC laws have tightened up the lending regulations and I think they have improved the quality of the industry and its credibility

Clown Killer5:51 pm 21 Oct 10

2604, Ive used a broker for purchasing residential proerties on a number of occasions – mainly fo rthe same reasons that Jazz points out. Having said that, I have found that brokers have problems when the finance arrangements get complex or the proerty isn’t your run of the mill unit or detached house – and that’s where private banking services come in really handy.

hey 2604, I use a mortgage broker for my investments & do so because i figure my time is far better spent earning enough to pay the resulting mortgages than chasing around a whole bunch of different lenders for the best deal & structure.

Yes, i could do all these things myself, but i’d far prefer to be enjoying some music and a glass of wine and having a specialist take care of it and the mountains of paperwork that come with a loan application.

Rachael Hunter10:23 am 21 Oct 10

Hi Picketer. I’d just be interested to know. If an accountant offered you his services FOR FREE wouldn’t you take it? That is essentially what a broker offers. Why not get a recommendation or quote for a product from a broker? It costs you nothing. You can then go and compare that product for yourself. Using a broker is about saving you time and money. Isn’t that a good thing?

I’d be interested to know how many of the “property investment” regulars on RA (VY, George’s Genitals, and anyone else who contributes regularly when we discuss the topic) use a mortgage broker and how many seek out the best deal for themselves. Also interested to know why you choose to DIY or go through a broker.

No Newbies please.

Hi all,

I just wanted to take the opportunity to add my positive experiences in dealing with Rachael. Almost a year ago Rachael helped my brother and I finance the purchase of our home. We were both completely financially illiterate at the time and Rachael went above and beyond several times to make sure we understood the ins and outs of different home loans. This included the role of the solicitors (and she was able to recommend a good one!), the First Home Buyers Grant and our options with several mortgage lenders. At no time did we feel patronised or pressured by Rachael, in fact, she was all too happy to assist with a potential big problem caused by the lender days before settlement. I highly recommend engaging Rachael to help navigate through the pitfalls of buying a home. Thanks Rach!

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 Chairman9:32 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 Hunter4:05 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 Hunter3:57 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 Golfer3:57 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 racing identity3:52 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.

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 Hunter3:06 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

…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 Hunter7:32 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.

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

Rachael Hunter5:12 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 racing identity4:07 pm 18 Oct 10

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

Rachael Hunter3:52 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

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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