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Changes for Mortgage Brokers and how it affects you

The Royal Commission has recommended changes to the way Mortgage Brokers are paid.

We’ve worked closely with mortgage broker, Craig Tracey for a few years now. An expert and passionate broker, who’s helped many Hopscotch clients finance homes and businesses.

In December 2018, 59% of all new home loans were written by Mortgage Brokers, which marks the highest market share for Mortgage Brokers ever recorded.

And now, faced with the findings from the recent Royal Commission, we thought it best you hear from Craig about how this will affect the mortgage broking industry and your relationship with mortgage brokers. Check out his main key take outs below.

Mortgage Brokers are still paid by the banks

The Royal Commission recommended that Mortgage Brokers be paid by the borrower. However, this recommendation has not yet been adopted by the Government and will be reviewed in three years’ time.

This means that for now, Mortgage Brokers will still be paid by the banks, and not paid by the Borrowers.

People are using Mortgage Brokers more than ever

The Royal Commission uncovered significant misconduct by the Banks, however there was not any misconduct found to be carried out by Mortgage Brokers. As mentioned, in December 2018 59% of all new home loans were written by mortgage brokers.

Recent research has also shown 95% of borrowers are either satisfied or very satisfied with the service they received from their Mortgage Broker.

Craig’s ongoing service to Clients

The Royal Commission recommended Mortgage Brokers should not receive ongoing trail commissions that are used to provide their ongoing service to their clients. The Government have confirmed this recommendation will be implemented from 1st July 2020.

Most importantly, Craig will continue to give clients ongoing service into the future to make sure their home loan is always competitive.

Final thought

At Hopscotch, we believe mortgage brokers still play a vital role in helping every day, hardworking clients secure their dream home

Link to Craig’s website if you would like more information on how a mortgage broker can assist you

https://craigtraceylending.com.au

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About the Author

I’m a Chartered Accountant with 13+ years experience working with business owners. I previously worked at PwC for 9 years providing advice to wealthy individuals and business owners. Which involved working through complex tax and business matters.