Mortgage advisors, how do they get paid?

fenwick458

When I first applied for mortgages i was just getting laughed out of banks, and even if they hadn't turned me down i would have been looking at fees to set them up, i remember one was £1000 (buy to let, about 5 years ago now)

then I got put in contact with a mortgage advisor, who I think is brilliant by the way, and he found me a deal better than i could have found and i was approved for it. then a few years later I wanted to buy another house, but that year I had invested a lot of money in my company and the accountant had done a very good job of minimising my tax bill so it appeared i was almost broke and couldn't afford another house, but no problem for my mortgage advisor he found a particular lender who would base their lending off the previous years accounts, so i got another, again at a good rate and even got £500 cash back with the offer, and they deal with all the paperwork. seems too good to be true...

and i'm currently in the process of getting another one, again from the same guy. BTL morgage, 2.8%, no setup fees fixed for 2 years, with £250 cash back.

and inbetween this one of them came up for renewal, again he gets in contact the month before and finds the best deal to switch to,

am I being naive here or what how does the guy make a living sorting all these deals out? i don't pay him for it??

TiberUK

the bank pays him

[Deleted User]

I charge a fee for my services. And the lenders pay commission for introducing business (and for taking liability of advice of their hands)

Some who do not charge fee's either survive by volume or by having higher average mortgage sizes.

By taking less volume and charging a fee I feel I can give more time to my clients and I feel I can give a better service

SonOf

Most brokers charge a small charge (typically around £150-£500) and get a small percentage of the mortgage advance paid via the lender.

The idea being that the lenders dont have to pay for branches and staff as the broker is covering those costs.

In areas where property values are high, they may not make a charge. In areas of low property values, they have to as the mortgage amounts are too low.

ACG

Some will get commission, others will get commission and charge a fee.

Sounds like your broker works commission only.
We are fee charging like JMA.

[Deleted User]

To be fair, you shouod be well aware of how your brokerearns mo ey as you should get a copy of an initial disclosure document at the start of a meeting.
A lot of advisors also offer a list of the commission rates each lender pays

Retired_Mortgage_Adviser

In case readers see flashing £££ signs upon seeing the word "commission", I feel duty bound to point out that typical commission (called a procuration fee) paid by the lender for a residential mortgage is only about 0.35%, so £350 for a £100k mortgage. BTL mortgages pay a bit better.

FTBAngst

I wondered this when I had a change of circumstance.

Is there usually a minimum amount paid if they’re on commission? I had a mortgage approved (borrowing approx £200,000) The broker I used didn’t charge a fee. Sale fell through, months later I called her just before I changed jobs and moved to Bradford. She said to wait out the probation period and call her again then. As I’m earning approx 1/3 of what I did before, I wonder if she’ll be as happy to work fee-free in a few months...

haras_nosirrah

There isn't a minimum (with the exception of 1 or 2 lenders who do a minimum of £250)

I wrote a case last week where the commission from the lender was £77. I would have got around £40 of it. I did charge a fee so at least got something out of it.