Mortgage broker fees?

McClane54

Hi

After some advice. I’ve only had my first mortgage for 2 years and the fixed rate is up next month.

I have been speaking to a mortgage broker/specialist in our local community and she said she could start the process off for me and find me the right deal. Her fees are not all £495 but as a community member in our area, she said she can do it for £295. If she fails to get one for me then half my money will refunded

Does that all sound about right?

Any help or advice would be great

ACG

A Mortgage broker can charge more or less what they want when they want providing the customer is in agreement.

My personal view is that if someone comes to me for a Mortgage, they should only be paying if they get the Mortgage. If the application is declined then I would not charge the customer. But she has been open about her fee structure so it is down to you as to whether it works for you or not.

Other brokers take the view that they are doing work and should get paid regardless of the outcome.

Neither is right or wrong.

amnblog

Further to what ACG said...

It is right if you are comfortable with it and happy with the service.

It does not sound like you are being overcharged if that is your concern.

dunstonh

Does that all sound about right?

I have seen lower and higher. In areas of low property values, the fee tends to be higher as the lender pays the broker far less than in an area with high property values (due to larger mortgages).

If she fails to get one for me then half my money will refunded

That is a very common model and allowed.

My view is different to ACG. If the broker has done all the work and through no fault of their own, the mortgage ends up being declined then they have every right to receive a fee. However, it is up to each broker to decide what works for them and variation of a theme are not an issue as long as the charges are disclosed.

Our model is that if we believe the mortgage is a no go and we tell the person that, then no fee is payable. The fee becomes payable on submission. If the mortgage is declined because of non-disclosure then no refund is made. If it is declined for unexpected reasons then we refund half. If the person makes a new application for a different property, then no new charge is made or the different levied if a half refund was done previously.

The bulk of the brokers work is before the application is submitted. And with suitability reports moving to pre-issue later this year and files expected to be completed pre-sale, then the work for a broker will be the same whether it is declined or accepted.

McClane54

Thank you all for your replies