Mortgage Broker Fees

brightsprite

Hi,

I know this has probably been asked and answered a million times on here - but I thought I would put your brains to good use once again.

We are arranging a Let to Buy mortgage so its not really straightforward but I wondered if a 1% fee was acceptable to ask of us. The independent advisor would also take commission from the lender.

I don't begrudge paying if this is about right because we feel we couldn't do this on our own. But I would be interested in others views.

This fee would also be payable if the mortgage didn't complete - we believe, but are double checking.

Thanks - any help really appreciated as we are a bit naive to this process!!

brightsprite

Sorry to clarify the 1% fee is charged by the mortgage advisor aside from the mortgage arrangement fee set by the mortgage company.

GMS

How much is the loan.

brightsprite

hi,

It's £170,000

GMS

1% sounds high. Let to Buy not totally straightforward but still doesn't justify a fee like that IMO.

If you aren't happy eith it then don't sign. Find another broker. Personally any fee I charge is payable on completion so all of the risk is on me.

If you aren't comfortable then renegotiate the fee or walk away.

ACG

1% isnt cheap, but its not excessive. It is on the higher side though.

Dont agree to anything where you have to pay if the mortgage doesnt complete -this gives the broker a get out clause. We put a stipulation in our contract that says the fee is refundable if the lender does not make an offer - this ensures we have to do the research properly and not make an application on a punt.

brightsprite

Thanks so much for your help and speedy response. The loan is actually £150k with deposit so actually not as much.

Is it usual to ask for a fee and take commission. I know people shouldn't work for nothing!

GMS

With fee and commission this will be around £2,000. I am certain you could get a broker to do this for much less.

dunstonh

1% for an independent sounds fine as long as its on independent basis. However, commission and fee sounds more likely it will be whole of market rather than independent.

s it usual to ask for a fee and take commission. I know people shouldn't work for nothing!

Yes. Typically around £250 plus commission on whole of market basis but a bit more on independent basis (to reflect the fact that no commission is being retained)

ACG

£2k before deductions... (Network fees. Tax etc).

I charge a fee and take commission, most brokers i know do the same. I think GMS is right in that this situation is not straight forward but its far from difficult, receiving £2k is on the high side for this job.

If your taking out protection products with this i think you will be able to get this price down - although if someone came to me after i had done the recommendation and then wanted to negotiate the fee i would be pretty annoyed. In my eyes you cant agree something then go back on it after some of the work has been done but thats just me.

brightsprite

Thanks again gold stars - great help!