How do Mortgage Brokers interface with Banks?

[newbyvest85]

Hello

I will be doing a few restructuring shortly, and for the first time, I decided things are too hard to handle on my own (especially as many front line personal bankers appear quite inexperienced and seem to always give incorrect initial advice), so decided to go for a Broker this time.

Say there are 3 properties (A - owner occupied, B and C - rental) and in this situation, there can be multiple permutations. Bank X may like property A as security, Bank Y may not like A as much etc... Conversely, my Risk Profile may be more compatible with Bank Y whereas Bank X may think I am too risky etc.

Does Mortgage Brokers, in this situation, advertise the situation in a 'industry website' and so the banks will have an option to apply/tender and make their offers; or do the Mortgage Brokers have to apply to each banks individually, and use their own experience to decide if Bank X will like property A? And say if Bank X rejects A, then they will go back and offer property B?

Would be lovely to hear how Mortgage Brokers work! Thanks.

[Sportsvee]

A broker will get as much info about your situation as possible and go to the bank that they believe would be best for you.

They don't just put it out there and let the banks come to them. Doesn't work like that. The more failed applications they put to a bank the higher chance of losing accreditation with that bank.

If already with a bank, broker has to approach current bank first before looking elsewhere.

Broker has to do what is best for you as a client.

[hawkeye]

Some brokers will put you with a bank that pays them highest
commission and with whom they get volume bonuses or other perks for being a big seller.

[brokerman]

Some brokers will put you with a bank that pays them highest
commission and with whom they get volume bonuses or other perks for being a big seller.

Crap. All banks within reason pay around the same and any broker found to be putting themselves before the Client can be struck off. No one deal is worth the risk.

[JimNic]

Crap. All banks within reason pay around the same and any broker found to be putting themselves before the Client can be struck off. No one deal is worth the risk.

A broker we just used and go our house with disclosed his commission for all banks they use and what they get out of it.
Some were double of others.
He ended up getting the highest commission out of all the banks but that was only due to us using that bank for our day to day stuff already and we really didnt want to move banks.

But then with the variable commission our broker gets with each bank could be to how much business they send there way compared to other banks.

[brokerman]

A broker we just used and go our house with disclosed his commission for all banks they use and what they get out of it.
Some were double of others.
He ended up getting the highest commission out of all the banks but that was only due to us using that bank for our day to day stuff already and we really didnt want to move banks.

But then with the variable commission our broker gets with each bank could be to how much business they send there way compared to other banks.

Must be using different banks to me then. Only thing I can think of is some banks pay say 0.7% up front (pretty average) whilst others pay 0.5% plus a monthly trail commission of say 0.2% for the life of the loan. This then means same same. No bank pays double another, sorry.

[JimNic]

Must be using different banks to me then. Only thing I can think of is some banks pay say 0.7% up front (pretty average) whilst others pay 0.5% plus a monthly trail commission of say 0.2% for the life of the loan. This then means same same. No bank pays double another, sorry.

Ok just shy of double
Lowest on person commission was 0.45, highest on 2 banks were 0.85

[brokerman]

The 0.45% probably BNZ plus they pay a trail too (0.2% life of loan) so ends up about the same

[Nick G]

Some banks pay a trail and others more up-front. If you were looking at double the commission over the life of the loan (or a long time) that would be a big deal.

[Nick G]

A good broker will go through your position with you and discuss the best strategy going forward. Unless there is something that can be perceived as negative (leasehold, flood/quake zone, non-consented works etc etc) by one bank over the other they should all accept a registered valuation provided the valuer was on the panel. Some banks will insist to pick the valuer but if you have a recent valuation because you applied to another lender they should be OK with it. If no registered valn available they will look at E-Val or C-Val... usually these trail the market however.