Buy to let mortgage and broker advice please

Legacy_user

I'm ready to move forward with purchasing properties on a buy to let basis and I wondered if anybody has any advice they could pass on with regards to good lenders or good brokers.

I had the chance to talk to a person at a buy to let bank that doesn't deal directly with consumers and was told that buy to let brokers can charge up to £5,000 in associated fees to arrange a mortgage and that there is a big difference between fees between the different brokers and suggested that smaller brokers appear to offer better value for money than larger ones. Any thoughts?

amnblog

Thoughts? £5,000 fees? Nonsense.

System

Is there any merit to the point that was made that there can be a large difference between brokers based on the fees they charge? Please note that we were specifically talking about buy to let mortgages and not residential

amnblog

They were talking nonsense.

Brokers fees have little to do with the size of the business.

The majority now will charge between £500 and £1000 for a buy to let deal.

dunstonh

was told that buy to let brokers can charge up to £5,000 in associated fees

The typical ballpark is around £150 to £295 in rural areas rising to £1000 in city locations. I suspect the £5000 was sales BS.

Is there any merit to the point that was made that there can be a large difference between brokers based on the fees they charge?

No. Cost is a mixture of covering expenses and the areas they are in. London and Home counties brokers get paid more commission than rural brokers. You would think that would make the fee lower. However, in reality, it does not. However, very low house price areas often need a higher fee to reflect the lower commissions on smaller mortgages.

A city location will have higher costs than a rural location. So, the fees may be higher. Some firms target upmarket and run higher charges. Or prestige services. Others deal with a higher volume lower quality market. Those are the sorts of things that influence broker charges and whether you get a glass of champagne when you visit the office or a mug of coffee (which of course is paid out of the charge you pay).

A BTL property portfolio owner will often find they get better terms on repeat business using the same broker.

System

Thank you dunstonh and amnblog both for your replies.
It does explain it
Essentially like all businesses such as having a quote for a similar spec kitchen from two builders you can get different prices for similar work

ACG

Fees are not usually linked to quality of the broker, however fees can be a sign of how busy the broker will be - a fee free broker typically has to do twice as many mortgages as a broker who charges a fee of £500 just to earn a similar sort of income.

Who would you expect to be around to answer questions more, the one doing 10 mortgages a month or the one doing 20?

£5k fees as amn says is probably the exception rather than the norm. The highest fee I have ever seen is £3k and that was about 7-8 years ago. Most fall in the realms of £0-1500.

BTL Mortgages now a days are quite complex. As a general rule of thumb you are going to get a better service from a smaller firm because everything is much more personal.

System

ACG wrote: »

Fees are not usually linked to quality of the broker, however fees can be a sign of how busy the broker will be - a fee free broker typically has to do twice as many mortgages as a broker who charges a fee of £500 just to earn a similar sort of income.

Who would you expect to be around to answer questions more, the one doing 10 mortgages a month or the one doing 20?

£5k fees as amn says is probably the exception rather than the norm. The highest fee I have ever seen is £3k and that was about 7-8 years ago. Most fall in the realms of £0-1500.

BTL Mortgages now a days are quite complex. As a general rule of thumb you are going to get a better service from a smaller firm because everything is much more personal.

Thanks for the comment ACG. I've only telephoned a large well known broker who whilst they might be excellent I agree that invariably you'll get better service with a smaller broker.

Does anybody have any recommendations for a bank that can handle both bridging/light refurb and convert that then into a buy to let.

Could someone comment on the best achievable fixed interest rates that are available?

silvercar

jackskypath851 wrote: »

Thanks for the comment ACG. I've only telephoned a large well known broker who whilst they might be excellent I agree that invariably you'll get better service with a smaller broker.

Does anybody here deal specifically with buy to let and bridging loans? I'm looking for bridging which then converts to a buy to let as exit strategy (How I'm going to repay the bridging loan) and then to build up a buy to let portfolio

I'd be delighted if anybody could recommend brokers. Ideally I prefer a broker I can actually pic up a mobile phone and speak to

Feel free to PM me any broker recommendations

It is against forum rules for people to PM you selling their services. In any case, you have no knowledge that people are who they say they are. Far better to ask your friends/ family for recommendations.

System

silvercar wrote: »

It is against forum rules for people to PM you selling their services. In any case, you have no knowledge that people are who they say they are. Far better to ask your friends/ family for recommendations.

Thanks silvercar for the heads up! I'll go ahead and remove that