Mortgage broker fees

sirich99

Hi Guys

I'm looking for some advice with regards to a alarming invoice we have had today from our Mortgage Broker.

We managed to secure a mortgage as first time buyers using the brokerage services of Mortgage Advice Bureau. It wasn't a great experience and we had to do a lot of the chasing and communicating with the bank directly.

From our initial meeting we were quoted a fee of £145 for the services. We were told that the broker has an option of charging up to 1% of the loan amount but they did not exercise this option and charge a set fee of £145.00. I even have an email from my broker stating this as I was a little confused after the initial meeting.

We moved in around a month ago and our broker contacted us regarding our life insurance and income protection. We decided to arrange our own cover and told our broker this.

To our dismay, we have now received an invoice from the broker for 1% of the loan amount.

Any ideas why this has happened? Is it due to the fact that we have decided to arrange our own insurance?

Any advice on steps we can take would be much appreciated.

RickyC_IFSWP

You should look through paperwork that was left to you which highlight these charges and how the mortgage broker is paid. If they wanted to charge you 1% of the loan directly (rather than take commission from the providers), I imagine you needed to sign some sort of "letter of engagement" to agree to this.

betmunch

In your email, or other documentation, is there any mention on the fee of £145 being reliant on you taking insurance through them?

ACG

It could just be a mistake?

Send an email to them stating you think it is incorrect and attach the email. See what they come back with.

What does it say on your KFI?

amnblog

MAB keep their fee policy fairly loose by saying

' There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.'

This gives them room to charge from £0 to £1,000 on a £100,000 mortgage.

The idea of a 'typical fee' is one I do not like as it does not really mean anything.

A number of brokers will look for a larger fee if you are limiting their opportunity to earn by not taking insurance, not taking it with them, or taking it and not paying for it.

Whatever, they intend to do regarding fees, it should have been clearly set out for you before you engaged the broker.

ACG is right in that a good source to check fees is in section 8 of your mortgage illustration.

Alternatively, you may have signed a fee agreement so check that thoroughly.