Commercial mortgage broker fee advice

tbumps

Hi

I've been chatting to a number of brokers recently and their fees vary greatly, I've come across a couple who ask for a fee with application of £395 - £495. One of these tried to convince me to sign a form agreeing to pay this even though I'd told him I would think about it - he said it didn't commit me to paying despite the form very clearly binding me to do so!

This makes me concerned that paying a fee at this stage isn't a great idea in general. Another broker charges a much larger fee when a mortgage offer is made. Presumably this means that if he gets an offer with an interest rate of 25%, I'd still have to pay him even though the offer is unaccepatble. (I know that he will have done work to get to this point & it would be unfair if he did that & I turned doen a more reasonable offer but it still seems like a risk to take). Others charge fees as a % of the mortgage value once the mortgage is arranged.

Can anyone tell me which is standard practice or offer other help?

Thanks

TB

Leon_W

There isn't a standard practice. Commercial mortgages are unregulated so you really do have to be careful otherwise you leave yourself wide open to be ripped off by the unscrupulous.

I would try and seek a recommedation from someone and probably expect to pay an upfront fee. It depends on your particular circumstances to be honest. If it was a complicated and difficult case to place I'd charge an upfront fee and if it was pretty straightforward I'd be more inclined to defer payment until I either had an offer, or the mortgage completed. Without knowing the circumstances I don't think anyone could say whether a fee was fair or not.

MortgagePerson

I am a commercial mortgage broker

I i AM Ii

MortgagePerson

I am a well established commercial mortgage broker

I do not request any fees up front I request full details of the clients funding requirements On receipt, I source a suitable lender then request various documents to complete and request other items

At that stage I need to request a fee to progress matters to engage my services

If at this stage, and confident that I can seek a funder I do need to be renumerated for my profesional services

Otherwise I am out of business