Mortgage Broker Prices

Dan_1976

LOL this really is the one question that can go on for days and weeks!

I believe in fee free, however with lenders offering direct and direct only lenders pushing rates and having the better deaks, I would do the work myself or pay a fee to get all mortgage lenders searched!

dunstonh

I have no problem with fee free but I prefer hybrid fee where you agree a fee and then use commission to offset that. Where there is surplus commission, you rebate or enhance terms. Where there is a shortfall, its made up by the client. That way you remove any perceived bias and can include non commission paying options.

In the case of mortgages you could therefore use your own fee in a cost analysis as well as the commission rebate.

The fees free option "smells" very like the old days on investment business when commission paid advisers used to claim they were free of charge. The FSA stomped on that but they dont appear to have done so with mortgages (how often do we say that. One rule for investment advisers, another conflicting position for mortgage advisers).

Ian_Griffiths_Halifax

OK guys. I hear from business development managers that the average broker is doing 1 mortgage per week at best.

I don't dispute this, but how can they afford to do this without charging a fee?

OK, if they work from home and from their back bedroom, then they have reduced overheads, but they don't have the staff backup of a company who might have staff who can look after things while they are away, or on other appointments. This can cause many problems.

I did 7 mortgages last week, 2 or which were £18750 mortgage and £25250 mortgages. Can anybody suggest how I could have done these without charging a reasonable fee?

minimike2

Im charging fees now if the case is below £80k. Not much...but even with a fee I still only end up with £253.80 before tax on an £80k case.

Its a business decision at the end of the day. If I lived in London and did one mortgage a week I would earn more than that on commission alone on one average size mortgage, so wouldnt charge a fee. I will continue to not charge where I do not feel it necessary, but will charge on a case by case basis where I feel its warrented.

Ian_Griffiths_Halifax

minimike2 wrote: »

Im charging fees now if the case is below £80k. Not much...but even with a fee I still only end up with £253.80 before tax on an £80k case.

Its a business decision at the end of the day. If I lived in London and did one mortgage a week I would earn more than that on commission alone on one average size mortgage, so wouldnt charge a fee. I will continue to not charge where I do not feel it necessary, but will charge on a case by case basis where I feel its warrented.

How do you word your IDD minimike. You can PM me if you prefer.

minimike2

YGM!
:j :j :j

andrewmp

minimike2 wrote: »

Im charging fees now if the case is below £80k. Not much...but even with a fee I still only end up with £253.80 before tax on an £80k case.

Its a business decision at the end of the day. If I lived in London and did one mortgage a week I would earn more than that on commission alone on one average size mortgage, so wouldnt charge a fee. I will continue to not charge where I do not feel it necessary, but will charge on a case by case basis where I feel its warrented.

How many hours work is involved to earn you over £250?

Ian_Griffiths_Halifax

andrewmp wrote: »

How many hours work is involved to earn you over £250?

Many. I calculated it at roughly 8 hours PLUS all the time of the administrator and the cost of running a business, while not getting paid for 2 months on a typical remortgage.

Read this thread. http://forums.moneysavingexpert.com/showthread.html?t=1139613

seikothrill

My broker has always charged me £500 although I believe he can charge up to 1% of borrowing amount.

I once went to a fees free broker and am sorry to say I had to return cap in hand to my original broker as the fees free broker offered worse service and actually advised me incorrectly.

In today's world you get what you pay for so personally for me £500 represents good value

koexelek

feeblminds wrote: »

Was a bit annoyed as the broker didn't tell me he was charging a fee until the end of the second meeting.

A bit daft to do that.

Unless both parties know the costs up front, it could be a wasted meeting ( or two meetings) for both.