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leereni

BTW when I said about using mortgage advisors. I am using a mortgage advisor as I would expect some sort of expertise in this field. Not somebody who can do almost the same as what I can do. Otherwise what's the point.

kingstreet

Quite.

I don't think anyone here would disagree with you.

All brokers are not the same.

I emailed a new potential client last night with our Initial Disclosure Document. I had to explain that our normal fee is £249 on completion, not the £295 upfront and upto £700 on completion shown thereon.

We have to show the maximum we might need to charge for a difficult and involved case, even if it will not apply to 99% of our clients.

He responded to me this morning to say he didn't realise there was "an advice fee," which wasn't how I described it, but fair enough.

I've responded to him to say that if we cannot improve on what he can achieve elsewhere, by at least £250, he should not use us, as he should be looking for value for money.

I'd advise anyone else to do the same thing. If a broker can't add value, and your seems to be the exact opposite of that, I suggest going direct, or going elsewhere.

leereni

Yes, your approach appears to be very fair.

I think I can talk for most when I say people don't mind paying some sort of fee, but that should be on acceptance of an application. But this should be clearly mentioned beforehand. Also, as previously mentioned, they should know something about the mortgage application process. Not just putting numbers in boxes and pressing a button. I would expect an advisor to have recent experience of who will be accepted and not.

"He responded to me this morning to say he didn't realise there was "an advice fee," which wasn't how I described it, but fair enough."

Based on the above quote, exactly how did your client think you got paid?

kazza85_2

I am currently using a mortgage advisor through the estate agent I bought my house from.

He does not charge us for any of his work and his fee is paid by the lender (if and when we get our mortgage approval!).

I am based in Scotland though so I don't know if that makes a difference against work involved/fees charged etc but there are advisors out there that don't charge you.

leereni

Yes, it sounds like a bit of a lottery. To pay or not to pay a fee. That is the question?

kingstreet

leereni wrote: »

Yes, your approach appears to be very fair.

I think I can talk for most when I say people don't mind paying some sort of fee, but that should be on acceptance of an application. But this should be clearly mentioned beforehand. Also, as previously mentioned, they should know something about the mortgage application process. Not just putting numbers in boxes and pressing a button. I would expect an advisor to have recent experience of who will be accepted and not.

"He responded to me this morning to say he didn't realise there was "an advice fee," which wasn't how I described it, but fair enough."

Based on the above quote, exactly how did your client think you got paid?

I'd explained to him that the fee covered advice, recommendation and arrangement and I think he thought he'd be charged for an initial consultation.

The IDD is specific on fees/commission options and most go for the commission + fee option, as they end up best off.

The independent option, where they pay a higher fee but get commission rebated doesn't really work in my area, where our typical commission payment is around £250.

kingstreet

kazza85 wrote: »

I am currently using a mortgage advisor through the estate agent I bought my house from.

He does not charge us for any of his work and his fee is paid by the lender (if and when we get our mortgage approval!).

I am based in Scotland though so I don't know if that makes a difference against work involved/fees charged etc but there are advisors out there that don't charge you.

The location may have something to do with it, as the commission paid to us is value-related.

Typically a High Street lender pays between 0.3% and 0.35% of the mortgage amount. In my area, that works out at around £250 to £270. It isn't possible to offer a face-to-face, two-appointment in-home client "advice and arrangement" service for that amount alone.

leereni

Ok, so what is your advice regarding whether to pay for a fee or not. I've spoken to one advisor who charges £250 but another who doesn't charge anything.

kingstreet

TBH I wouldn't presume...

There are brokers who don't charge, brokers who do. I'm in no position to say one is better than another. My business model means I have no option but to charge. If I operated in an area where the average mortgage was £200k I wouldn't have to charge, but I'd possibly have higher costs as a result of being in a "better" area.

leereni

Ok thanks. It sounds like its best to look at the broker who doesn't charge, I think anyway.

Don't suppose you could recommend a broker in Bedfordshire?