Mortgage broker commissions uncovered

87 MortgageBroker

So you’ve decided to partner with a mortgage broker to smooth your first – or return – entry into the world of property, mortgages and loans.

But before you choose your mortgage broker, it’s worth understanding the value they bring to the lending equation, and also how their commission structure works. After all, if you’re not paying the broker for their service and advice, who is?

What can I expect from a mortgage broker?

A mortgage broker will work with you to understand your goals and objectives, as well as your borrowing capacity, and will help you secure a loan that meets your needs from a panel of lenders. This includes reviewing a range of loan products, negotiating with panel lenders on your behalf and seeing the loan application process right through to settlement.

In Australia, many mortgage brokers provide their services to customers free of charge. In nearly all cases, brokers rely on commissions paid by lenders on loans settled consequent to applications the brokers submit on their customers’ behalf.

Many home owners and property investors work with mortgage brokers because they provide expert knowledge and have a comprehensive understanding of the lending landscape. Researching loan products can be time consuming, however mortgage brokers have the features of numerous lenders’ loan products at their fingertips, saving their customers a lot of legwork.

How do broker commissions work?

Lenders pay mortgage brokers a commission on the loans they arrange for customers. Generally, mortgage brokers receive two types of commission from lenders. They may receive an upfront commission that is based on the amount of the loan settled and they may also receive what’s known as trail commission calculated on the outstanding balance of the loan.

In each instance, the mortgage broker should give you particulars of the commissions they will receive on your loan.

I’m not a first homebuyer – can a mortgage broker still assist me?

If you’ve bought property before, chances are you’ll have some understanding of the lending environment. However, loan products change frequently, as do lender terms and conditions, so working with a mortgage broker can help even the most seasoned property buyer secure a competitive and tailored loan product.

Mortgage brokers provide an expert and time-saving service to loan customers all over Australia.

To help you secure your home loan, contact your broker today.

We thought you might also like...

0036 BLOG 26 Mortgages and break ups some practical tips

Mortgages and break-ups: Some practical tips when separating

Breaking up is hard to do. On top of the emotional impact, there are practical ramifications as well.
Read More >
0021 BLOG 41 Top financing apps and paths

Top financing apps and tools

Whatever your reasons, understanding your budget is key to living a comfortable life. Whether you're saving for something in....
Read More >
77 SimpleGuide

A simple guide to small business loans

Small business loans can be great when you need to get your brand up and running or cover unexpected expenses.
Read More >
0056 BLOG 4 Borrowing money for renovations what you need to know

Borrowing money for renovations: What you need to know.

You’ve been dreaming of that new kitchen and dining room for as long as you can remember, and now the time has come to put your....
Read More >