No-fee broker: pros & cons?

ambioni

Hello- what are the pros and cons of using a no-fee mortgage broker (i.e. a broker who doesn't charge a fee to do a mortgage application for you and instead makes money by taking commission from the lender)....? I am seeing one tomorrow who is no-fee and whole of market but am wondering if they will have fewer deals available to them? Or are there any other disadvantages?

kingstreet

Is the size of your mortgage going to earn them enough to make your case a priority?

As an example, we did a £37,000 mortgage recently. If we didn't charge our £250 broker fee, the £137 commission would not have allowed us to take the case as we would have made a loss based on the compliance and processing costs.

If you are doing £200k mortgages all day, the £700+ commission makes doing "fee-free" a more viable option.

caprikid1

Given the massive shortfall in protection amongst borrowers most good advisors will be eager to ensure you have the correct level of protection for your mortgage. The protection side of the equation could well offset the potential loss on the mortgage.


Never discount a broker who does not charge a Fee / Charges a Fee it is no sign of quality of diligence.

pickles13

I have said this before by my fee-free broker has been absolutely fantastic. Replied to every email on the same morning (usually the same hour), answered all of our silly questions (FTB) and I couldn't fault him, despite people telling me 'you get what you pay for'. Our mortgage is worth £1100 to him (I saw it on the formal offer) and I will probably use him for insurance so he is probably making a fair sum from us but I have no idea if that has made any difference or not.

Gadge2011

We went with London and County and the advisor we were given was great. He returned phone calls / emails within a few hours, even past 5pm and couldn't do enough for us.

We went from full application to mortgage offer within 14 days (inc waiting for survey to be done / valuation returned)

I suppose it's like anything, It just depends depends who you get. There are plenty of horror stories out there people that have gone the free and the paid route.

pinkteapot

caprikid1 wrote: »

Given the massive shortfall in protection amongst borrowers most good advisors will be eager to ensure you have the correct level of protection for your mortgage. The protection side of the equation could well offset the potential loss on the mortgage.

But there are some brokers who are whole-of-market for mortgages but not for insurance products (ours was one). If they start trying to sell you insurances, check they're whole of market and do your own price comparisons to check their prices.