mortgage refused with bank, using a broker - fees

ACG

Commission helps to reduce the fee. Unless I was doing £300k+ mortgages I would not do this job for commission alone.

I have done fee free and the income does not warrant the work and stress that comes with it.

I can only speak for myself but I only charge if I get a Mortgage offer, although I do have a fee agreement that states if client pulls out after I have come back with a lender (ie done the research) but prior to offer then I reserve the right to charge up to £250 to cover my time and expenses. If mortgage is declined I do not expect to be paid as the client has come to me for a Mortgage, so if I do not get it then why should they be out of pocket?

Sheep

Do all lenders give different amounts of commission?

My broker is getting £500 from leeds for a 149k mortgage but isnt charging me a fee.

ACG

It varies but most pay around .35% gross, which ties in with what you have said.

But he will not get £500 in his pocket.

PixelPound

Fees can be a divider of opinion, especially as on MSE, its all about saving money. Really though, fees should be looked at in terms of value for money. A year ago when I started down the house buying route I saw the a MA who had offices inside a local branch of an EA, who said they were independent, weren't whole of market (though used "a wide range of lenders") and could deal with the whole process including negotiating sale price. Independent yet posing with the EA staff for the branch photo? They charged £300 on application (though this was in fact £500, but reduced if you took their insurance policies), I decided to decline.

It is a question of what you are getting for for fee and when the fee is payable. The fee-guarantee ACG is a good idea, even if you put a caveat on saying unless it was for something not revealed at the initial meeting. I wanted a smallish mortgage (under £80k) and it wasn't enough to motivate some. Sure they'd take my case, specified the fee, but I felt they'd have simply shrugged if it didn't work out. One said "we can try the Halifax, if that doesn't work out maybe Natwest or someone", another said "your only option is a sub-prime lender", and another who said he'd had several like mine said it wouldn't be a high street lender but phoned a few days later with good news that a high street lender might consider us because our loan is small!

It's all sales tactics, and when you are used to sales tactics you can smell them a mile off. The MA we went with said he would have to charge us a fee of £300 on application as he would only get a small commission due to the size of the mortgage, fair enough. What made me go with him is at our initial meeting he listed who he thought would be our best chances and which we should go with, though he'd need to double check once he'd got everything, which is free advice as we hadn't committed to anything. In fact due to our case being referred at DIP stage, as we only gave him the cheque for fees when he did the application, we received the Offer before the cheque cleared!

stressederic

I am in a position to buy, I just didn't expect my bank to decline my application so I was relying on the things that would have come with my deal with nationwide, and would have had money to spare.

I didn't ask and was not informed there would be fees for using the broker as I was in a bit of a panic and I think that £1k is a joke when places do it on commission.

I appealed when Nationwide declined my application and they accepted it, the problem was with my address showing in different variations and not showing my credit report properly. I do have to pay them 10% deposit though, which takes all my savings, and I have the money at the end of this month to pay all the solicitors fees. I don't have to pay stamp duty, or pay for removals

Malmo

stressederic wrote: »

I didn't ask and was not informed there would be fees for using the broker as I was in a bit of a panic and I think that £1k is a joke when places do it on commission.

Were you not provided with an Initial Disclosure Document (IDD) or Terms of Business by the broker at the start of the process? Failure to provide this key document is a red flag when selecting a broker to represent your case, because it explains the service being offered and the fee structure.