Broker advice

student87

Hi Everyone

Just need some advice.Currently on an interest only motgage only, at a fixed rate which is coming to an end. We are at the moment re-motgaging, and our broker has found a simillar interest only mortage with another lender.

Problem is, he will be charging a fee of £1500. Is this right? Should I go to another broker? Problem is, I have only another month till my fixed rate ends.

Thanks

koexelek

That sounds a rip off to me.

Are you sure it's his fee, not the lender's ?

dunstonh

Problem is, he will be charging a fee of £1500. Is this right?

Is he charging the £1500 or is the lender charging it?

If it is the broker then that is very expensive. You can get fees free advisers out there or advisers that only charge a more reasonable amount (couple of hundred to £500). Some will charge a fee but rebate the commission earned, if any and that is a good way of doing things.

koexelek

dunstonh wrote: »

If it is the broker then that is very expensive.

Do one case a week and earn £78k per year !

dunstonh

They probably do. They may lose 3 people not willing to pay but if they keep 1 in 4 they earn the same and do less work for it. You can push that too far though

koexelek

dunstonh wrote: »

They probably do. They may lose 3 people not willing to pay but if they keep 1 in 4 they earn the same and do less work for it. You can push that too far though

Doubt if they get much repeat business or referrals though :eek:

arkie

What is it with our industry, people moaning how much each business charges, yes there is fee free brokers out there , but not for long. Do solicitors slate each other off about how much they charge or dont charge.?
The OP hasnt mentioned how much the loan is, if they are refunding commission etc.
The only way forward in this industry and the FSA want you to go down this route is fee charging. I know of IFA's who complain about a mortgage broker charging 1% broker fee, then the same IFA's will go out and write an investement and take 3% plus renewals.!!!!!!!

dunstonh

I know of IFA's who complain about a mortgage broker charging 1% broker fee, then the same IFA's will go out and write an investement and take 3% plus renewals.!!!!!!!

With respect, building and managing portfolios requires more knowledge, experience and qualifications. So, you would expect charges to be higher there. Yet, the FSA averages for collectives is 1.8% and fee based advisers (hybrid or conventional) are usually cheaper than that with a figure closer to 1% or less. You will find plenty of posts in the investment section where we slate greedy investment advisers.

Charging £500 for a mortgage is more reasonable for the work done and knowledge required. £1500 is greedy. Especially if there is commission being taken as well. If that £1500 included mortgage commission rebate and no commission taken on insurance products then that would be reasonable and fair. If the lending case requires more work and isnt your typical then a higher fee can be justified as well.

The FSA are cracking down on unreasonable fees and commissions. Just ask any firm that has had a visit from the FSA recently and they will tell you that there has been a heavy focus on what fees/commission was taken and what level of work justified the fee. A lot are finding that they cannot justify if and are going to get slapped wrists.

koexelek

arkie wrote: »

The only way forward in this industry and the FSA want you to go down this route is fee charging.

Unfortunately , although the FSA would like it, a lot of the public wouldn't.


A lot of people would not want to pay a broker a fee to arrange a mortgage with a lender, when they could go to the lender direct and get the same deal without a broker fee.

I get what you are saying... we are well worth paying for the work we do, but the public don't always see it that way.
They are happier to pay a solicitor for services, because they have no choice.

Unfortunately, a lot of people ( including many people on this forum) seem to think people in the financial services industry should do everything for nothing.
In my opinion, fees are fine if they offer value for money

I just think that £1500 is a bit steep if he is not refunding the proc fee. I am sure the OP will enlighten us as to whether this is the case or not.

student87

No, not lender's fee. It's the broker's. Have his letter in front of me now. And no refund either. I didn't think you could go to a lender direct, you had to go to a broker?

koexelek

student87 wrote: »

No, not lender's fee. It's the broker's. Have his letter in front of me now. And no refund either. I didn't think you could go to a lender direct, you had to go to a broker?

Depends on the lender.

Some , like HSBC, you have to go direct.
Most lenders will take applications from either a broker or a branch
Some lenders do not have branches and only deal with brokers

A good whole of market broker will advise on all though.