Broker Fee & Commission...

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leecasey
leecasey Posts: 18 Forumite
in Mortgages & endowments
Hi my broker is charging me a fee of £750 plus receiving £740 commission on mortgage of around £180k. Seems excessive? What can I do in this situation other than try and negotiate the fee?

Thanks

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  • kingstreet
    kingstreet Posts: 38,766 Forumite
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    Use a different broker if you aren't happy with how yours is remunerated. However, make sure you don't suffer a lower quality service as a result.

    Much of that is eaten up in overheads and regulatory costs given the amount of time and effort which has to go in to administering a mortgage application.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • paddyandstumpy
    paddyandstumpy Posts: 1,486 Forumite
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    Why is it excessive?

    My broker is £500 fee plus commission from the lender, if he get's us over the line with a mortgage (application is going in this week!) he'll be worth his weight in gold.

    If you don't want to pay someone for the work they are doing, do it yourself.

    As above, there are heavy regulatory and overhead costs, especially things like Professional Indemnity insurance for an IFA.
  • Neutrinno
    Neutrinno Posts: 310 Forumite
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    Why is that excessive? As above use another broker if you're not happy with the fees, but you typically get what you pay for. If the broker is providing you with a good service, getting you the best deal and taking a lot of work off your hands then why does it matter how much commission they are getting from the lender?
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • csgohan4
    csgohan4 Posts: 10,587 Forumite
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    you get what you pay for generally
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • ACG
    ACG Posts: 23,727 Forumite
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    The only bit that is costing you is the £750. The £740 is paid from the lender and will not cost you either directly or indirectly.

    If you are unhappy with the cost then you can try to renegotiate or go elsewhere. Personally I take the view that if we have agreed a fee, we agree the fee. You would hate for the broker to up the fee because it is taking them more time for example and so it does work both ways.

    The time to negotiate the fee is at the outset before any work is done (in my opinion).
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • dunstonh
    dunstonh Posts: 116,374 Forumite
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    The £750 fee is at the upper end of what you see. On another thread earlier today, a number of us mentioned our fees and they were in the £150-£299 range.

    However, fees are often dictated by where you are in the country. A broker with a high street office is likely to be more expensive than a rural office. An employee broker is likely to be more expensive than an owner/director broker (employee needs to share their remuneration with their employer).

    You do get expensive and cheap around that just as you do in any profession. I got some quotes for some minor building work and one of the quotes was 20 times the cheapest price. I didnt go with the cheapest though. (nor the expensive one).

    The time to question the price is before you employ them. Its too later after the event. And £750 is not too far away from the ballpark to make it excessive.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Mortgage_Adviser
    Mortgage_Adviser Posts: 374 Forumite
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    Also, it depends on the complexity of your case. Specialist brokers, who for example deal with adverse credit history applicants have to charge more as the research takes longer. This means they can do fewer cases than the brokers focusing on prime cases.
    adverse lenders however would only pay the same comission to the brokers as the prime lenders.
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