Mortgage broker fees

dobymicks

I have just has a mortgage illustration sent over from a broker.

The broker charges £299

They also get paid from the lender.

TSB will pay ***************** a total of £408.44 in cash and/or benefits if you take out
this mortgage.


Is this the case for all mortgages, does the broker always get a commission on top of what they charge the customer?

Thanks

dunstonh

Is this the case for all mortgages, does the broker always get a commission on top of what they charge the customer?

The commission lenders pay varies. However, it is not as high as it used to be. Although the workload for mortgage brokers has gone up significantly in the same period that commissions declined.

Some brokers will charge no fee and only consider commission paying lenders. These tend to be in the more expensive areas where the commissions will be higher due to the higher level of borrowing.

In cheaper areas, many mortgage brokers will charge a fee to reflect the lower level of commissions received due to lower borrowing levels.

Some brokers will be fee only and will rebate commission if it is received.

So, various models. Your commission is low. So, the fee is not unexpected and is in the ballpark of what you would expect to see.

muhandis

1. Brokers usually get a commission from the lender known as a 'procurement fee' i.e. the £400.

2. Some brokers charge a fee (the £300) on top of it, some don't. Depends on their operating model.

3. When researching brokers, personally I didn't come across any that arrange a residential mortgage for just a fee, however they might exist.

In any case, thanks to regulatory requirements the mortgage illustration is incredibly transparent on the fees they receive, which is good.

EDIT: My broker gave us a 50% discount on the fee upon pushing him a bit, but that was primarily due to me being referred to him by a friend, thus cutting the time spent on "selling" his services to me.

dobymicks wrote: »

I have just has a mortgage illustration sent over from a broker.

The broker charges £299

They also get paid from the lender.

TSB will pay ***************** a total of £408.44 in cash and/or benefits if you take out
this mortgage.

Is this the case for all mortgages, does the broker always get a commission on top of what they charge the customer?

Thanks

Neutrinno

dobymicks wrote: »

I have just has a mortgage illustration sent over from a broker.

The broker charges £299

They also get paid from the lender.

TSB will pay ***************** a total of £408.44 in cash and/or benefits if you take out
this mortgage.

Is this the case for all mortgages, does the broker always get a commission on top of what they charge the customer?

Thanks

Nope, although it is very common but depends on how their business operates.

amnblog

TSB are paying your broker £408.44 for the work done for them.


You are paying your broker £299.00 for the work done for you.

ACG

99% of lenders pay the broker commission.
The commission costs you nothing. If the lender did not get the mortgage from the broker, they would be paying their staff a wage to do the same job.

caprikid1

I would say £299 is bang no the money for the sort of Fee I would expect.

LJG1985

I paid £349 broker fee and, in my opinion, has been worth every penny for the help/advice/support I have received.

Three_Beans

Just this afternoon I have paid our broker £250 for his services and was clear he was getting approx £400 from the lender in commission based on a successful application

One of the few parts of the house buying process where I see the value and work!