Mortgage broker wants upfront fee and takes commision?!

DoubleOhScrimp

Good day,

Spoke to a mortgage broker today who was recommended by a colleague.

The broker's terms are:
> £190 nonrefundable arrangement fee
> Takes commission from lender

:eek:

I'm a straightforward FTB looking to buy a ~250k property @ ~80% LTV. I thought brokers were supposed to charge a fee OR give you the commission as cash back?

This one seems to want both :mad: Should I walk away?

gazter

DoubleOhScrimp wrote: »

Good day,

Spoke to a mortgage broker today who was recommended by a colleague.

The broker's terms are:
> £190 nonrefundable arrangement fee
> Takes commission from lender

:eek:

I'm a straightforward FTB looking to buy a ~250k property @ ~80% LTV. I thought brokers were supposed to charge a fee OR give you the commission as cash back?

This one seems to want both :mad: Should I walk away?

As a complete novice, i would want to know what added value he brings to the table with his fees, that brokers who dont charge fees lack.

Not attacking his business model. You want a mortgage, he can help. Getting you the right deal with the right lender is worth that £180, but if you have a straight forward application are you going to be as heavily dependent on his skills?

dunstonh

The broker's terms are:
> £190 nonrefundable arrangement fee
> Takes commission from lender

Seems fair enough. its a very common model in lower value housing areas as the commission is typically too low.

I thought brokers were supposed to charge a fee OR give you the commission as cash back?

Independent brokers have to have a fee option but the rest can charge what they like from zero upwards.

This one seems to want both Should I walk away?

I cant see anything wrong with that pricing.

_Andy_

DoubleOhScrimp wrote: »

Good day,

Spoke to a mortgage broker today who was recommended by a colleague.

The broker's terms are:
> £190 nonrefundable arrangement fee
> Takes commission from lender

:eek:

I'm a straightforward FTB looking to buy a ~250k property @ ~80% LTV. I thought brokers were supposed to charge a fee OR give you the commission as cash back?

This one seems to want both :mad: Should I walk away?

Seems fair enough

DoubleOhScrimp

Upon reading the terms more closely I see that the £200 fee only applies if the mortgage application is successful :beer:

Sorry to all the resident forum brokers I offended

As a FTB I'm am expecting to be shafted at every turn so I am somewhat suspicious :rotfl:

opinions4u

If you go straight to the lender you will save yourself £190.

The mortgage seller you see will earn a commission of sorts though.

That £190 buys you a scan of the market (you could use a number of comparison sites and do this yourself). But you will get £190 off you're interest bill within a year if you can knock 0.1% off your rate.

It buys you expertise and advice. Some have more expertise than others. It buys you an element of pan-market consumer protection. It buys you knowledge around who to apply to for non-standard cases. It buys you somebody to shout at the lender's processors and underwriters if needed.

If you can identify the best deal for you, have no credit issues, are happy chasing the lender yourself, know all the right questions to ask and aren't stretching income then I'd go direct. If there's anything less straight forward, £190 is probably really good value for money.

kingstreet

FWIW we charge £249 on application and also receive commission. However our average case case is under £100k and our total earnings per case is usually less than £500.

If that wasn't the case, we would not have to charge a fee. on a £200k mortgage the commission will be around £600, or more and we could make a profit on that alone.

Dave_Ham

Whilst I appreciate the need for cost awareness and I think the OP has attacked it in a respectful way, my opinion is dependent if you feel comfortable and confident with your broker.

I have seen brilliant service at fee free level and terrible service with much higher costs.

I would be ensuring you are happy with the communication, experience, suitability of advised product and after all this is a referral which speaks volumes.

Additionally it is worth verifying that your case is straightforward. I am not suggested it is not, but I see many clients who initially say that their situation is straightforward and they believe it is.

A few missed payments, a bank account they had forgotten about and a temporary contract later and the best buy rates are forgotten..

The fact the fee is only upon a successful application at least rules out our friends at the Estate Agency.

Best of luck

Lexiedhb

Our broker worked his butt off to get us our mortgage, and was fee free. If you think they will do a better job that a free one, or yourself then probably worth the £200, if not then save your cash.

tednol

Our broker charges £499 and gets a commission from the lender. Wouldn't begrudge the fee if he'd offered sound advice at every stage and had taken a weight off our shoulders in terms the leg work but it hasn't felt that way at all.