CASH BACK MORTGAGES

The term ‘Cash Back Mortgage’ is slowly but surely becoming more commonplace within the mortgage industry as brokers take more of a focus on addressing client’s best interests.

Put simply, a cash back mortgage is when the commissions paid to the broker are rebated to the client, usually directed back into their home loan, saving money on their mortgage by reducing the net debt amount. This means less interest is charged, shortening the time it takes to pay off the loan. This helps the client (you) become mortgage free sooner with nil effort!

Mortgage brokers normally take all the commissions

Typically, mortgage brokers receive a commission from the lender you borrow money from. This is why they appear to offer a free service to their clients. These commissions are made up of an upfront payment to the broker, followed by what are referred to as trailing commission payments, usually paid by the lender to a mortgage broker on a monthly basis for the life of the loan.

At Naked Wealth Mortgages we charge a one-off fixed fee regardless of the size of your loan. You can use the commission payments to pay our fee, so all other commission payments are rebated to you until the loan is paid off.

Our service goes well beyond providing you with a great product

On top of all this you receive our financial expertise which goes well beyond mortgage broking, as we are also qualified independent financial planners and authorised tax practitioners. We can help you understand how your mortgage fits into your broader situation and lifestyle goals. Is what you’re planning on doing in your best interests?

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WHO IS A FEE FOR SERVICE MORTGAGE BROKER?

Similar to a fee for service financial adviser, a fee for service mortgage broker rebates all commissions back to the client. Instead of taking commissions, they charge a set fee for the service provided.

How does this type of service benefit our clients?

Mortgage commission payments are based on the loan size, so a broker who suggests a client borrow more receives more commission. This also works the other way where the broker will receive a lesser commission for a smaller loan. This may cause a conflict of interests between what is best for the client and what is best for others. While we hope most mortgage brokers see beyond commissions and focus only on their clients, at Naked Wealth Mortgages we believe the right choice is to charge a fixed, transparent fee irrespective of the potential commission received from the chosen lender.

Also the client is often better off financially using a fee for service mortgage broker. After the fixed fee is paid at the beginning of the loan (using commissions received from the lender), the client receives all further commission payments paid by the lender until the loan is paid down to zero. There is an upfront commission payment, followed by trailing commission payments, with the latter usually paid by the lender to a mortgage broker on a monthly basis until the loan is paid off. The client may use the commission payments to pay the initial fixed fee, meaning the client never needs to pay anything out of their own wallet for the service received. Then once the fee is paid, all other commission payments are the client’s to keep!

If all this wasn’t enough, clients of Naked Wealth Mortgages receive financial expertise which goes well beyond mortgage broking, as we are also qualified independent financial planners and authorised tax practitioners, who can help clients understand how their mortgage fits into their broader situation and lifestyle goals.

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We are ethical mortgage brokers who give you the commissions!

We are ethical mortgage brokers who give you the commissions!

We are ethical mortgage brokers who give you all the commission payments we receive for the life of your loan. Isn’t this a no brainer?

Do you know the real cost of your mortgage? How much will you pay in interest to your lender until the loan is paid off? For most of us the cost of our mortgage is thought of as just something we have to accept in order to eventually own our own home. Therefore we tend to not want to think about the true cost, however ultimately this is a bad idea. You should know that based on the average loan, the interest paid and other costs can add up to hundreds of thousands of dollars over a 30-year time frame by the time you pay it off. Exactly how much depends on your circumstances but you get the idea… it’s a lot of money! That’s why we believe getting the right loan at a competitive interest rate is only the beginning. We show you how to structure your repayments to help save you a lot of money over the life of the loan. We start this off with a bang by giving you back all mortgage broker commission payments (upfront and ongoing) into your nominated account for the life of the loan. If this wasn’t enough you can take comfort in knowing you are in the hands of professionals who have helped many hard-working Australians save money and become debt free sooner. What are the commission payments we give you when you refinance or apply for a new loan with us? These are made up of an upfront commission payment, followed by what are referred to as trailing commission payments, usually paid by the lender to a mortgage broker on a monthly basis for the life of the loan. You can use these commission payments to pay our once-off fixed fee (if you wish), meaning you never need to part with money from your wallet to pay for our expertise. Then once our fee is paid, all other commission payments are yours to keep until the loan is paid off. By simply placing these payments into your loan’s redraw facility or offset account, you have the potential to save a lot of money with nil effort, and this is before implementing any one of our other money saving strategies we offer. Our one-off fee is fixed regardless of the size of the loan or the lender Typically, mortgage brokers receive and retain commission payments from your chosen lender (this is their payment instead of charging you a fee). Different lenders pay different commission amounts to a broker on settlement of a loan, which means the broker gets paid more (or less) depending on the lender recommended. The commission payments are based on the size of your loan amount, so a broker who suggests you borrow more gets paid more. This also works the other way where should you borrow less, the broker will receive less commission. Whilst we are confident most mortgage brokers see beyond commissions and focus only on their clients, we feel this may cause a conflict of interests between what is best for you and what is best for others. Therefore we believe the ethical choice is to charge a fixed, transparent fee which removes any potential conflict. Our financial expertise goes well beyond mortgage broking We are qualified independent financial planners and authorised tax practitioners. We can help you to understand the bigger picture and how your mortgage or other debt fits into your broader situation and lifestyle goals. We can help you answer common questions like: Should I buy a home, an investment property or maybe a different asset? How much should I borrow? How can I use debt to pay less tax? Can I actually afford this loan? How can I protect my family if something were to happen to me? Ensuring you are properly educated will help you make the smartest money decisions for you and your family. We hold a separate Australian Financial Services License (not relating to credit advice) that we use to provide other such advice if appropriate. Welcome to the future of mortgage advice!