Commission only job/business -- Getting loans

[investorak]

Im looking at a change of career. Most likely being a mortgage broker/financial advisor but also looking in other property related jobs eg real estate agent/property manager

In about 3 years i want to buy more investment properties. If i worked for someone else or had my own business in one of these fields they are mostly commission based (except property management). Is this going to be nearly impossible for me to get loans when its time to buy?

How do people get on that are paid commission only with getting loans?

Is anyone aware of many successful property investors that are mortgage brokers/financial advisors?

[Wellington Broker]

Very easy. Writing a loan for a real estate agent right now under some of the toughest lending conditions we've seen and all they want is 12 months history for commissions - that's under retail. Business banking can make exceptions to this. If you're a broker you have access to all their policies - e.g. there is one non-bank lender who will lend to newly self employed customers with a 35% deposit and no declared income......

[investorak]

Thats really good to know, thank you

What % deposit do they need to put in to it?
Is it one of the top 4 banks or a non bank lender?

[Wellington Broker]

Deposit requirements are the same for self-employed so long as they have full financials (i.e. up to 90% with a bank). Most self employed people will just be the same as retail bank clients if they have financials

Newly self employed without full financials have options with 20% deposit with minimal verification through options like Resimac:

https://www.resimacdirect.co.nz/self-employed-flexi-doc-home-loan

Interest rate on that product with self declared income will be higher than a bank mind you and you're looking at the settlement fee of $475 + valuation cost. Similar products are available through Liberty and Avanti.
Brokerman writes a lot of stuff like this with Resimac - he's pretty much their top guy

[investorak]

Couple of extra questions, sorry im a detail person,haha

What do you mean by full financials?

Newly self employed = less than a year? 2 years?

Are business owners treated the same as self employed?

[Wellington Broker]

Full financials = Financials prepared by an accountant and presented to IRD. Most banks assessing a retail application (rather than BB) will want one years worth but some may require two.

Newly self employed will vary between lenders but that Resimac product is available to anyone without financials who has been working for 18 months+. Liberty's product is for those who have been working self-employed less than 6 months

Someone who is a business owner will need to provide more evidence than someone who is commission only or a contractor due to the level of complexity. Here in Wellington you get quite a few people who might contract to a govt department as an IT worker - they're treated almost the same as a normal employee. Someone who has a business that is operating with a higher turnover and significant expenses will look very different and would typically be assessed by a business banking credit team

[brokerman]

Deposit requirements are the same for self-employed so long as they have full financials (i.e. up to 90% with a bank). Most self employed people will just be the same as retail bank clients if they have financials

Newly self employed without full financials have options with 20% deposit with minimal verification through options like Resimac:

https://www.resimacdirect.co.nz/self-employed-flexi-doc-home-loan

Interest rate on that product with self declared income will be higher than a bank mind you and you're looking at the settlement fee of $475 + valuation cost. Similar products are available through Liberty and Avanti.
Brokerman writes a lot of stuff like this with Resimac - he's pretty much their top guy

Thanks mate!

We do write a lot of these and my take in 2017 is that Resiamc will increase their lending a lot as the Banks tighten up. They are the only 'all status' lender in NZ, meaning they can do 90% for a first home buyer to 80% for a discharged bankrupt (like this morning) and everything in between. Rates depend on their funding line (Westpac or BNZ)

I'm looking forward to this year very much.

Cheers!

[Connor]

Brokerman and WB, in these kind of loans, usually who pays the lending and brokerage fees?

[brokerman]

Brokerman and WB, in these kind of loans, usually who pays the lending and brokerage fees?

The Lender normally charges a settlement fee of around $475 and also pays a commission to the Broker. Depending on the complexity of the deal (ie how many hours spent) we sometimes charge a fee, payable on settlement only. Another reason for charging a fee is that there is a clawback period of commission for 27 months and lets say that sometimes people use us as a 'bridge' and so we end up working for love. Not on my watch!

[investorak]

1) Is it realistic to think i can work part time in my current job and do mortgage broker part time?

2) Some Aggregates require mentorship. Where would i get this from? Would i need to be an employee for a company and be assigned a mentor.

3) If i worked for a company they would normally pay for the aggregrate's fees?

4) To gain the knowledge/qualifications who is the best to get qualified via? strategi? professionaliq? open polytech?

[brokerman]

1) Is it realistic to think i can work part time in my current job and do mortgage broker part time?

2) Some Aggregates require mentorship. Where would i get this from? Would i need to be an employee for a company and be assigned a mentor.

3) If i worked for a company they would normally pay for the aggregrate's fees?

4) To gain the knowledge/qualifications who is the best to get qualified via? strategi? professionaliq? open polytech?

I think doing anything part time is a non starter, particularly mortgage broking which demands a lot of attention. That's my view anyway!

[Wellington Broker]

The banks are not going to accredit you if you do it part time is the issue. They're also cracking down on minimum volumes - Westpac cancelled 200 accreditations a couple of weeks ago

For aggregators which require mentorship best to speak with them around the requirements. Whether fees are paid by you or the company will depend on the business model and commission splits.

The PAA course through Professional IQ has the best reputation