How do mortgage advisers get paid?
If you don’t pay a service fee, or pay for the hours they spend on your application, how DO mortgage advisers get paid?
Well, the answer is actually a lot more straight forward simple than you might think.
When a home loan professional such as a mortgage adviser works with a client and provides them with a great deal – competitive interest rates, logical and productive structuring of the loan, helps them be prepared for the repayments, and also helps them get the application completed and delivered to the bank for approval – they have actually done a lot of the work a bank employee would normally have to do.
That’s why you don’t have to pay your mortgage adviser – the bank who eventually ends up financing your application will pay the mortgage advisor on acceptance and draw down of their proposal.
The role mortgage advisers take on before the loan application is approved:
So, when the mortgage adviser brings the bank a fully prepared potential home buyer with an excellent application they don’t have to do nearly as much work! By taking all of this off the bank’s plate, the mortgage adviser is saving them time and workforce commitments, and are remunerated accordingly.
If the bank pays the mortgage adviser, does that mean the mortgage adviser isn’t working for you?
Nope! The mortgage adviser is working on your behalf – they will be paid by any of the banks within their network. That means that before they approach the bank, they have already worked out with you which of the bank’s mortgage options are best suited to your circumstances. Only after you have come to a conclusion on the best bank for your home loan do they get started on negotiating the interest rates and work on out the best deal on that option for you.
Are mortgage advisers on commission from banks?
Technically speaking, any time a wage or salary is based upon the successful completion of a sale or process that is called being on commission.
However, because a mortgage adviser works with several lenders in order to provide the best advice to each individual client on which lender they should pursue a home loan with, they are still not bank employees.
Commission structure changes, often from bank to bank but also can come down to other factors as well. As mortgage advisers, we take our role in home buys lives very seriously indeed, and this means that we always want to be 100% transparent about why we work alongside the lenders we do in order to being you the best deals and work out the most beneficial arrangements on your behalf.
