Martins View On Using Mortgage Brokers...

dunstonh

On reading the blurb, it seems that they charge between 3 and 4 % on completion.

flipping hell. Thats disgraceful.

To be honest, I dont know how they can get away with that charge if its correct.

Elainer

Thanks , I gulped hard as well.
Any ideas on what would be a fair fee? We want to borrow £90k house worth approx £130 ish.

dunstonh

Any ideas on what would be a fair fee? We want to borrow £90k house worth approx £130 ish.

£500 with no commission. (i.e. if there was commmission then it is offset against the fee) or commission only with no fee.

Ian_Griffiths_Halifax

dunstonh wrote: »

flipping hell. Thats disgraceful.

To be honest, I dont know how they can get away with that charge if its correct.

The %age isn't disgraceful so long as there is a cap.

If the mortgage was £15,000 and they charge 4% that's only £600. The application form is the same size for a £15,000 mortgage as it is for a £1.5 mil mortgage.

On a £90,000 mortgage that is FAR too much though.

If you deal with somebody working from home £500 is fine (with commission offset against this) but please appreciate that companies who work from professionally from an office have overhead to pay.

dunstonh

The %age isn't disgraceful so long as there is a cap.

Thats a fair comment.

Elainer

Thanks to all for the info.
The key facts sheet states:
A maximum fee of up to 4% of the mortgage amount or £3995 whichever is the lesser, payable on completion.
The advisor we saw has since stated it would be between 3 - 4 % - but i'm going to cancel further appointment now and look elsewhere. I have no qualms in paying a fee but thats a lot of money.

Ian_Griffiths_Halifax

Elainer wrote: »

Thanks to all for the info.
The key facts sheet states:
A maximum fee of up to 4% of the mortgage amount or £3995 whichever is the lesser, payable on completion.
The advisor we saw has since stated it would be between 3 - 4 % - but i'm going to cancel further appointment now and look elsewhere. I have no qualms in paying a fee but thats a lot of money.

A lucky escape. Based on your mortgage that is a total rip off. This broker needs to get real.

sockpuppet

I work for a mortgage broker who is whole of market. We quite often don't charge fees (in the majority of cases) we just are paid a procuration fee by the lender - which sometimes is as little as £100 depending on the amount of the mortgage. We have started charging fees in some cases, but our basic fee is £99 when we submit the application to the lender and then £99 when/if the client recieves a mortgage offer. We also get the procuration fee as well. We started charging purely as some cases do take quite a bit of work (especially if hey have had some credit difficulties) and we may find that we have to make applications to one or poss two more lenders before we get an agreement in principle for the client (we only charge the initial fee once - when we actually submit the application to the lender who has approved it in principle)

Scrubs

The advisor I had been in for a chat with was a 'whole of market', and charges a flat fee of £299. Got an email from him at the start of the week recommending two 2 year fix rate deals and said that they were the best on he market right now. After a quick interweb search on 2 year deals I instantly had results of better 2 year fixe rates with lower fees.

Done a bit more research today and have landed now on a 3 year fixed rate with the RBS, again with only £499 fee, and fixed at 3.99%. Called today to give him a chance and see if he could come up with anything better, said that he couldn't match it, and that the RBS deal was only available direct and not through a broker. Called the RBS and have arranged an appointment for Monday now. Really didnt see the point continuing with him and paying £299...

Mrs_Bumble

I am wondering how people feel about the article last week in relation to the FSA looking at the possibility of aboloshing commission/procuration fee's being paid to mortgage brokers.

I am a mortgage broker and operate my own small company, for me the thing I enjoy most is working with clients and helping them, customer service is of the very highest importance and the people that come to me I care about (sorry that sounds a bit gushy!) But I genuinely enjoy helping people and so for me this latest move by the FSA is a very worrying one because if it happens it will mean that to stay in business every broker/IFA will have to charge a fee, which will potentially mean that more clients go direct to the lender where for the most part they will be offered a non-advised sale and be subjected to every cross sale approach.

Be interested to hear your views?