Ethical, Honest and Always Improving.

Ethical practices form the foundation of a trustworthy business. At Best Foot Forward Mortgage Solutions, we prioritize integrity in all our dealings, ensuring our clients receive transparent and truthful information. Honesty is not just a policy; it's a commitment to treat every client respectfully and fairly.

Striving to be better is at the core of our mission. We continuously seek ways to enhance our services, whether through improving our processes, expanding our knowledge base, or embracing new technologies. Our dedication to ethical and honest practices, closely following the regulator’s guidelines, codes of practice and laws, drives us to provide the best possible support to clients on their financial journeys. We believe that through constant improvement, we can foster positive relationships and empower our clients to make informed decisions.

Australian Securities and Investments Commission (ASIC ) strictly regulates mortgage broker commissions under the law. The National Consumer Credit Protection Act 2009 (National Credit Act) requires mortgage brokers to act in the best interests of consumers when providing credit assistance. Where there is a conflict of interest, mortgage brokers must prioritise the interests of consumers.

Mortgage brokers in Australia facilitate over 74% of all residential mortgages in Australia.

Lenders pay mortgage brokers and earn two types of commissions. Brokers usually get fixed commission rates from lenders. By law, mortgage brokers must act ethically, prioritize their client's best interests, and inform clients about how commissions are structured and the percentages.

Commissions

1. Upfront Commission: This is a one-time payment to the broker by the lender when the loan is settled. The amount is generally a percentage of the loan amount and can vary between lenders. Upfront commissions, typically between 0.65 - 0.70%, are paid 30 days after settling the loan.

2. Trail Commission: This is an ongoing payment made to the broker by the lender for the loan duration. It is usually a smaller percentage of the loan amount and is paid annually if the borrower continues to hold the loan. The rate can range from 0.1% to 0.35% annually, with an average of around 0.15%. For example, if a broker arranges a home loan of $500,000, a 0.15% trail commission would translate to $750 annually.

Mortgage brokers generally receive standardised commission rates from lenders. By law, they must inform their clients about the structure of these commissions and the percentage involved. It's important to note that commission earned by brokers is revenue for their brokerage, not their income.

Clawback

Clawback is when the loan is held with the lender for less than two years. The mortgage broker must pay back some of the commissions if the client refinances. A mortgage broker can not recoup any clawback costs from their clients.

Best Interest Duty (BID)

Mortgage Brokers must act in the consumer's best interests when providing credit assistance: s158LA and 158LE of the National Credit Act 2006.

Best Interest Duty Laws governed by ASIC regarding the conduct of mortgage brokers in Australia ensure that they act in the best interests of their clients when providing financial advice and arranging loans. Introduced to enhance consumer protection, these laws require brokers to prioritize the needs and preferences of their clients above all else.

Under these regulations, mortgage brokers must thoroughly assess a client's financial situation, looking at various factors, including income, expenses, and future financial goals. This ensures the recommendations are suitable for the client's needs and conditions.

Conflict Prioty Rule (CPR).

Additionally, brokers must disclose any potential conflicts of interest and provide transparent information regarding fees associated with the mortgage process. The mortgage broker must always act in the best interest of the client. The CPR This duty of care helps to build trust and accountability within the industry, ultimately leading to better outcomes for consumers seeking mortgage solutions.

Best Interest Duty (BID) and Conflict Prioty Rule (CPR) Laws aim to create a more ethical framework for mortgage brokers, ensuring clients receive advice and services that genuinely serve their financial best interests.

Feedback and Complaints

We welcome your feedback and will always try and improve our service to our clients. After every loan settlement, we will send out a Client Feedback Form.

If you need to file a formal complaint, email adam@bestff.com.au, and this letter will be responded to within 30 days. If the problem is not resolved, Best Foot Forward (QLD) PTY LTD is an Australian Financial Complaint Authority (ACFA) Member Number 53614.

If you have any questions about our terms and conditions, please get in touch with me on 0417 693 281, and I will be happy to help you.