Mortgage Arrangement Fees

Trebor16

it's been a long time since I used the services of a mortgage broker so I am a little out of touch with some of the fees that could be levied nowadays.


I'm aware of the following possible fees that might have to be paid:-


Product fee
Mortgage admin fee
Valuation fee


Are there any others that could be potentially levied? I am asking because my niece is in the process of buying her first home with her partner and she is using a broker. She is having to pay the following fees:-


Admin fee of £99, valuation fee of £350 and another admin fee of £499. She asked about this and was told this was a fee to the broker for his services.


I seem to recall that brokers would receive a commission from the bank or building society which they would then use as their remuneration for their services. Is it normal practice nowadays for a broker to charge a fee for their services?

ACG

Admin fee - who does that get paid to? Im assuming the lender?
Valuation fee goes to the surveyor.
Broker admin fee is their fee to top up the commission presumably.

Some brokers are fee free but there is a lot more work now than a few years ago. Personally I tend to charge fees in addition to the commission as the commission is rarely enough to cover the work involved.

Trebor16

The £99 fee is payable to the lender. She has had to pay this up front to the broker along with the valuation fee and his broker fee.

ACG

So the broker is getting the £499, everything else goes to the lender.

The only other fees will be the solicitors fees and possibly stamp duty.

Trebor16

Is it normal to pay the entire brokers fee up front?

ACG

It will vary. Some brokers charge upfront, others on offer, others on completion and some will split it up so part is paid on application and the rest later on in the process.

Personally I charge it all on offer as I see it at that point I have done my job in obtaining the mortgage.