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.