It’s been a tough few weeks to be a banker. The Labor Party wants a Royal Commission into the banks; Westpac and ANZ are accused by ASIC of rate-rigging; and ANZ has admitted pays $2.6m in compensation for staff ripping-off home loan customers.
In this environment who can you trust when it comes to arranging, what is likely to be, the largest amount of debt anyone will face?
The answer is, of course, your mortgage broker.
Now, I imagine that you are saying ‘of course, you would say that wouldn’t you.’ But, if you think about how mortgage brokers are paid, it’s obvious why your broker really is on your side.
In the main, mortgage brokers make their money by being paid a commission by the banks. By-and-large these commissions are the same, whichever bank your broker takes you to. For a typical residential loan, a bank will pay about 0.65 per cent upfront commission and 0.15 per in trail commission.
What this means is that your broker has no vested interest in taking you to one bank over another. Their vested interest is in doing the right thing by you; knowing that if they do a good job for you, you will use them again and are likely to recommend them to others.
I have got a panel of over 30 lenders from whom I can choose. At any-one time, it is my job to know which bank is hungrier for a deal. I get a lot of satisfaction from contacting the banks’ Pricing Team (not something that the man or woman in the street has access to) to get the best deal.
Just yesterday, we were negotiating on behalf of a client (who had used us five years ago). Of all the banks, Suncorp were sharpest, with Westpac the best of the majors. Next week it could be Adelaide and CBA.
It’s also very satisfying getting a great deal for a customer from a bank that they could not access, say, Macquarie or Heritage.
John Symons was always on TV saying ‘We’ll save you.” And it’s true a god mortgage broker is a super hero – though I really don’t suit wearing tights with my underwear on top.