How should 'Mortgage Advisers / Consultants' charge me???

TheGaz1982

Hi,I was just wondering how a mortgage adviser should charge me?I am thinking of using one who is tied to no one, and will search hundreds of mortgages for me. Will he charge me a hourly consultation fee, or can he still get commision, even though he is untied.Please can someone advise me on the different types of advisers, how much they charge, or how much commision they will recieve.Thanks,TheGaz1982.

dunstonh

Will he charge me a hourly consultation fee

Possibly. Possibly not.

can he still get commision

Yes they can but also, some will rebate.

Please can someone advise me on the different types of advisers

Whole of market
Limited panel of lenders
single tied

how much they charge, or how much commision they will recieve.

How much is a tin of beans? Depends on the retailer. Mortgage advice is the same. You can pay little or nothing or pay lots. Smaller mortages are probably better off with commission paid and larger mortgages fee based with commission rebated or offset. Problem mortgages (bad credit etc) pay larger commissions. Standard Mortgages (mainstream high street lenders) pays very little.

JoeK_3

You need to be aware that there are different levels of whole of market advisers.

Although this has been debated on this site many times, there could be basically three types of whole of market mortgage advisers.

1) Independent; these would look at the entire UK mortgage lenders (including those that do not pay them a fee) and would more likely charge an hourly rate for their time an possibly rebate any commissions back to the client.

2) Fee charging whole of market advisers; these would look at the entire UK mortgage market, charge a fee and may not rebate any commissions back to the client.

3) Fee free whole of market advisers; these would probably look at the whole of market but may only select from lenders that would pay them an introducer's fee (procuration fee)

This is a generalization only and there are different variations of each of the three.

You should ask to see the Keyfacts of the advisers Initial Disclosure Document that should outline their charges. Further than this, all charges should also be clearly documented on the mortgage Keyfacts document that should be given to you on any recommendation.

JoeK

homer_j_3

It may be worth noting that "whole of market" does not mean that they will explore the whole of the marketplace including non commission paying lenders.

Whole of market is very misleading in my opinion as the FSA will allow advisers/firms to class themselves as whole of market if they can demonstrate that they offer a cross section of mortgages that represent what is out there in the marketplace. So as long as they have lenders that do prime, adverse, right to buy, buy to let, let to buy etc.. then this firm in theory could apply for whole of market status with a panel of 10 lenders.

You need to be asking your adviser:

Do they work off a preferred panel of lenders?

Do they research off this panel as part of their normal research or will they only do that if a lender on their panel is not suitable?

How do they get paid - is it as the others have said above - commission only, fee only and rebate of commission or do they take commission and fee?

Hopefully this will allow you to establish the true nature of the advisers status and allow you to make an informed decision.

Unfortunately Whole of Market is very misleading and my current employer could call themselves whole of market with having 39 lenders on their panel but because of the additional reporting back to the Financial Services Authority, they cannot justify the extra work involved for just saying we are whole of market. After all we would still have the same lenders available to our clients.