When do you pay a broker?

usapal

Hi, first post so please be gentle. We used a mortgage broker for our FTB mortgage and exchanged today. Had a phone call from the broker demanding immediate payment of his fees. The agreement we signed with him does not state a time frame to pay. We asked him if he's wiling to wait until completion to settle the fees but he isn't willing.


Happy with his service hence no problem paying as we agreed. When do you normally pay the broker, on exchange or on completion? Thanks for your help.

ACG

You have an agreement that says you agree to pay £x but not at a certain stage? What does your KFI say (section 8)? I would argue that you could hold off until completion if you wanted to.

My agreement states on offer of a Mortgage, but I send my invoices out at the end of the month so the reality is this month I had someone who went to offer on the 7th July who was only invoiced yesterday. I also had someone who went to offer on the 28th who was invoiced yesterday and a few in between. Most people pay it within a week or so of receiving the invoice, occasionally some people need chasing.

usapal

Thank you ACG. It was a simple agreement which states that we should pay a fixed fee of £500 to the broker if we use his services to obtain a mortgage. No time frame mentioned. We did ask about it when we'd our initial meeting but he advised not to worry about it.

silvercar

Arguably, until the mortgage has been paid over by the lender to your solicitor, your mortgage hasn't actually been 'obtained'. You do hear of very rare cases where the lender withdraws the mortgage before completion. So I would argue that completion would be the time that you should pay.

ACG

I suppose he has obtained you a mortgage.
This is why I send invoices, its a gentle reminder. You can then give people a week or so to find time to make a payment. Its a little unreasonable to expect it done on the same day.

usapal

Thank you silvercar and ACG.

I have spoken to him but would not agree to wait until completion and want the payment today. Claims that the payment is due once he got us the offer from the bank.

kingstreet

Please ask for a copy of the document you signed which agrees to that.

We provide a terms of business at the outset. It says our fee is due on application.

We provide key facts illustrations which show our fee is due on application.

When we meet with the client, they are asked to sign the terms of business.

They are also given a final key facts illustration.

A few days later they are invoiced and asked to pay within seven days.

Your mortgage offer will also refer to this in the KFI section, eight.

We can point to emails, illustrations, the offer and the signed terms of business all showing when we expect to be paid.

Can your broker do that for you?