What do mortgage brokers earrn?

amnblog

There was a post earlier this week where the poster appeared to have taken a broker's advice and was then seeking to avoid paying their fees by going direct to the lender with their application.


I also had a PM from a gentlemen considering a career as a mortgage broker who asked if he could expect to increase his income in this new career.


I was therefore interested to hear from borrowers as to their understanding of what mortgage brokers earn and why some mortgage brokers charge fees?

MJP43

My understanding is, and I'm happy to be shot down is that you guys get about 0.35% of the mortgage value and then a fee based on the level of work you need to find the right lender, typically anything from free to several hundred pounds and mostly somewhere in between.

No idea what you earn, I have no idea how many cases a broker who worked for himself could get through in a week but I would guess once established it's easily a living wage, and one well earned.

thestumper10

As above really, I know that Skipton BS changed theirs to 0.4% from January this year. No doubt well earned too with the extra work needed these days.
I would hazard a guess at around £1000 per successful application. That really is just a guess though.


I would imagine you charge a fee on low value mortgages and those that require more work like adverse or other complications.

amnblog

The key factor MJP is that most of us are small business people, so whilst you are in the ball park on the gross income, the profit is a different issue.

MJP43

I understand that mate. Every business has overheads

Also, if you don't 'win' a mortgage for your client, you don't eat.

Typically, how many hours work on one average case?

laura_louise

My mortgage broker will do very well out of me, in my opinion, and this is coming from someone who is in business myself and knows how expensive overheads can get. They are getting roughly 1k for the mortgage (if it's approved), and they have also sold me life insurance, i've used the Solicitor they referred me to, using their referral for surveys, and they are also going to do my Will for me once i've moved house, and they have arranged home insurance also. I will use them for all these services because they have been very helpful, i like them, and the rates that their referrals are offering are reasonable.

The business i work in is primarily commission-based like this, it is extremely hard work which is mostly unseen, and overheads can be higher than you'd expect, but the profit is definitely there and it's a relatively pleasant job one can do mostly from home if necessary. The worst bit is if the whole thing collapses and they don't get their commissions... but having a good turnover of new clients should even that out (if they can get the new business... that's a whole other issue..)

DpchMd

I imagine that, like most commission-based positions, earnings vary wildly from one broker to another. Some brokers - like those who spend most of their time answering the same questions over and over again on a discussion forum - probably don't do as well as others.

ACG

I dont get kickbacks from the solicitor I use, I think im in the minority here but shes awesome and for the sake of a few quid I would rather people use her than a cheap shoddy service elsewhere.

From my point of view as a broker, my first 5 mortgages were all done fee free. By the time all of my deductions had taken place I realised it was only financially worth doing if I charged a fee. If we were told we could not charge fees I genuinely would walk away, as much as I love the job theres a lot of work and stress for what we earn.

amnblog

We have an unusual situation where the law says our clients have to be told how much we receive from the lender.


A bit like John Lewis having a label on a Samsung TV that says your price £399, our cost from Samsung £138!


This does not of course mean that John Lewis are £261 up.

silvercar

My personal opinion, based on a lot of personal opinion and very little fact.

I would suspect that brokers working in areas with higher house prices earn significantly more than those in cheaper areas. I accept that they have higher overheads operating in those areas, but suspect that they still enjoy a better relative standard of living.

I reckon that the work involved in sorting a mortgage for 30k is very little different to the work involved in sorting a mortgage of 300k. Assuming mortgagee profile/ credit rating/ earnings/ required LTV is the same.

Sorting a mortgage of a very small amount eg less than 15k is probably a headache not worth the effort involved and that sorting a very large mortgage (£1m+) involves a different set of skills.

kingstreet

Saucer of milk for table #7, please.