Find out how mortgage brokers are paid.

2. Qualified Mortgage Brokers offer a free service to you
the client and then they are paid a commission by the
lender.
A qualified mortgage broker in Australia has achieved a
required level of education and they abide by a strict Code of
Practice. They are also required to be a member of
the Mortgage Industry Ombudsmen Service.

3. The minimum level of education required is the Certificate
IV in Financial Services (Mortgage
Broking) FNS40810 and some lending institutions require
the additional modules to complete the Diploma in
Financial Services (Mortgage Broking)FNS50310.
The commissions received by mortgage brokers are a
once off upfront fee which is worked out as a
percentage of the loan amount.

4. This commission is paid to do the work that a bank
manager would normally do. They may also receive an
ongoing trailing commission as payment for continuing to
assist with their client’s ongoing home or investment loan
administration requirements.
They are paid by the borrower in the form of a loan
origination fee, mortgage broker fees, processing fees,
etc. The funds used to pay these fees can come from loan
proceeds and closing costs in the purchase transaction.
They can range from 0% to 4% depending on the loan
amount and situation.

5. Many times a mortgage broker will only receive
compensation from one of these sources but can get it from
both. In some cases they won’t charge anything as far as
loan origination fees, etc. but receive compensation from
the lender. In other cases they might charge a loan
origination fee etc. but not get any compensation from the
lender.

6. Make sure that the broker does not let the size of the
commission they will be paid by a lender cloud their
judgment. While some lenders pay higher commissions,
brokers should not favour higher commission-paying
lenders over others. Under the MFAA Code of Conduct,
MFAA Members are required to disclose any commissions
upon request.

7. Most brokers do not charge a fee for their service
and are paid by the lenders they introduce the loan
to.
If they do charge an upfront fee, then ask why and they
should provide a valid reason for doing so. They should be
objective and offer at least a comparison between 3 to 5
lenders as a bare minimum.

8. It all really depends on what the client is trying to
accomplish and their plans for the property. Just remember
no one works for free and mortgage brokers can typically
get you a better deal than most banks and usually have
more funding sources to offer clients.

9. Intellitrain provides online and face-to-face
training courses for the Certificate IV in Mortgage
Broking, Diploma in Mortgage Broking, Diploma in
Financial Planning as well asCert IV in
Bookkeeping and Sales Training Courses in
Adelaide, Brisbane, Canberra, Melbourne and
Sydney.