Product Fee | Can be covered by Mortgage Broker?

Davina_Hart

Hi,

Looking for bit of advice really.

We bought a new built house a little over 1.5 years, our fixed 2 year rates are coming to an end at the end of March this year. Our current lender has offered us 1.51% fixed for 2 years with product fee. There are no credit and affordability checks. Our mortgage balance is 410,000 with 82% LTV. It’s a simple product switch as long as we keep the same term as we currently have.

I have since spoken to a mortgage broker to look at a cheaper deal, on friends recommendation, he took our details and advised the rate offered by our current lender is the cheapest in the market. He offered to assist with product switch with a cashback of £100.

He has not done any work for us, the same product switch I could easily do myself, he would probably get away with a lot more as his commission for transacting on our behalf. I asked him to cover larger chunk of our product fee through a cashback but he has neither accepted or denied.

He could probably cover whole of our product fee with the commission he would get.
Is there any mortgage broker who can assist with our product switch covering substantial one-off payment towards the product fee.

Cheers,

Davina

foxy-stoat

Davina_Hart wrote: »

Is there any mortgage broker who can assist with our product switch covering substantial one-off payment towards the product fee.

If there was then the broker would probably charge a higher fee only to discount it down.

They need to earn a living so will charge their flat rate or percentage based fees on the application.

[Deleted User]

It's possible for a broker to share the Procuration Fee with a client but its not something I would ever do to be honest. Some do, and some don't.

A £410k mortgage will give a Procuration fee of around £1435.

Perhaps try negotiate. If imagine most would shake your hand and wish you all the best and move on to a different client

Davina_Hart

Thanks for the response guys. Well I have to look at myself, I am not going to get someone easy money for literally telling lender to do product switch unless they are not willing to share decent proportion.
I know what I have to do, pick the phone up and speak to the lender direct

[Deleted User]

You underestimate the work if you think it's easy money. Also the broker won't actually receive anywhere near that amoubt, there are other people that take a cut before it gets to the broker.

The broker gives an advised service so takes the full liability of that advice for future complaints.
They still have obligation to give best advice and will need to document the case to the same degree as any other.

You've already taken this person's time and information for free, if its the exact same deal you end up doing directly with the lender whats the downside with letting the broker do it?

The lender won't waive a product fee, I guarantee that at least.

So if you can help an independent self employed person, rather than put more money in the hands of the banks/building societies, why wouldn't you let the broker do it?

Davina_Hart

No sir, I don't agree with you. I rather have control in my hand UNLESS there is some advantage. I have to think about lender here why would they have to pay someone when he has not invested real time in doing something. It is still classified as easy money in my eye. You can have different opinion, no issues.

Mortgage_Adviser

Davina_Hart wrote: »

No sir, I don't agree with you. I rather have control in my hand UNLESS there is some advantage. I have to think about lender here why would they have to pay someone when he has not invested real time in doing something. It is still classified as easy money in my eye. You can have different opinion, no issues.

You are saying in your original post that he has come back to you saying that the best deal available is with the current lender.
The only way he would be able to know about it is by doing the research.
So doing the research in your opinion is doing nothing?
You actually contradict yourself there.


If you say you would rather do the things yourself, why approach the broker?

Davina_Hart

Approach to a broker was to check if he has a cheaper deal (stated in my original post). Took 10 minutes for him to tell me the current lender deal is the best, out of the 10 minutes, for 8 minutes he has taken my personal information.

The searches are available via online search websites these days but I know you are going to say online comparison websites does not cover the whole market but to be honest he had access to the top three deals that I could see via a comparison website.

Anyway I want to thank you and others for their response.

ACG

There is about 30 minutes work with the lender doing a product switch.

We also have to do the research to evidence there are no significantly better options out there - we need to be able to evidence we are not just being lazy for the "easy money" as you put it.

Then we have to put you as a customer on our system and we need to document everything for compliance.

Regardless of whether or not you think there is 10 minutes work involved or not, the reality is there are a few hours work.

We then also have costs based on our turnover, insurance, FCA fees, compliance checks etc.

So not only is there work, there are also costs. I dont really care what your opinion is, in the real world you have no idea what we have to do behind the scenes.

If you would rather do the work yourself instead of getting £100 cashback for nothing - more fool you. I also love the double standards in your post. The broker is not allowed to earn easy money but you are. The irony is that the broker is actually having to do work for their money where as you are getting a kickback for allowing them to do it. You prefer being in control as you put it but really that is just an excuse for you to try and get as much as you can, why you cant just be an adult and admit you want more god only knows, I am sure people would have a lot more respect for the honesty.

I am with JMA, I wouldnt offer anything. But there will be brokers out there who will. Makes no odds to me what you decide, I am just not a fan of people talking rubbish. Just be honest, everyone knows where they stand then.

Davina_Hart

No worries ACG, you can say whatever you need to say, thats your opinion.
It seems I have challenged all fellow mortgage adviisor/brokers here when I have not.

Mortgage_Adviser

Davina, juts out of interest, who is the lender and how much is the lender fee.
I would like to check how much procuration fee is paid to the broker's firm