Product Fee | Can be covered by Mortgage Broker?

Davina_Hart

Lloyds bank

kingstreet

Lloyds is paying proc fees to brokers?

Since when?

Mortgage_Adviser

Davina_Hart wrote: »

Lloyds bank

As above. Lloyds don't do non commercial mortgages through the brokers.

[Deleted User]

Sounds like solid advice you've had then, advice given even when the broker probably can't actually submit business to them.

Saying that, Lloyds, like Halifax, are very rarely any good on existing customer deals so I'm a bit surprised they are the best available

ACG

Davina_Hart wrote: »

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.

It is not an opinion if it is fact.

You have not challenged us, you have got my back up a bit though. Nothing in our industry is easy, those days are long gone. We are heavily regulated and have costs we have to pay towards that regulation.

You are making out the broker is doing very little and getting paid a fortune for it. The reality is we have a lot of work even on easy cases and we then also have costs. Yet at the same time as making out the broker does nothing for their money, you are also coming out with some excuse as to why you should get a higher cut when you are doing even less than the broker.

I have no time for people talking rubbish, it might be the northern in me but I call a spade a spade. If you had said I want more for no reason other than I want more, I would respect that.

Retired_Mortgage_Adviser

Or (for eg Barclays) as low as £717.50 (0.175% proc fee after the mortgage club has taken its cut) from the 0.2% the bank pays them for a rentention (product transfer).

That's for the firm. If the broker is employed, he/she will probably get 20-30% of that figure as commission ie £143-215.

How much is the product fee again?

Also he must have superpowers if he can do a Lloyds product switch on your behalf!

It's completely understandable if you would rather do it on your own, but the misconception you have of a broker having no work to do for a product transfer is absolutely wrong. I wish that were the case!

Deleted_User wrote: »

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

haras_nosirrah

A Lloyds retention and the broker has offered to pay you? Is he a philanthropist as he won't be earning anything as Lloyds are direct to lender only.

haras_nosirrah

As others have said the brokers don't get the full proc fee for a product transfer. It is half a normal mortgage. That then gets whittled down substantially. Below is based on the set up I have. I don't have to pay office costs, compliance and fca costs or admin assistance but pay away 35% of my commission to a head broker for them to provide those facilities for me. Others will take the whole of the bit due to them but will be paying wages and office, compliance costs etc so this is based on what I would get

On a 410k mortgage for a product switch it would be about £820, the mortgage club takes some of that so down to about 717. The network then takes 9% so down to 652. As a self employed broker in an office I get 65% of that so 423. The tax man takes their 20% so about 330 in my pocket. I give you £100 so the net result is 100 to you, 230 to me. The broker then has to spend a minimum of an hour doing the write up, documenting everything to prevent any future complaints, and takes on liability for life. We wouldn't earn enough to pay a significant amount of your set up fees.

Not saying that £230 or £330 is not a lot of money. It is, however this is just to point out that the brokers dont get all the proc fee on the front page of a mortgage offer as there are significant costs involved and while I do product transfers for free because as you say from the brokers side there is a lot less work involved than a full mortgage so I don't charge clients for it, I would not pay the client for giving me the opportunity to do their product transfer
The client is getting my advice and time for free and even on a product transfer there is probably an hour to an hour and a half of work that goes on behind the scenes and we carry a lifetime of liability for the sale. It has been worked out an average mortgage comes with about 8 hours work behind the scenes for easier cases going considerably higher for complex stuff.

I think people think being a broker is just using a computer to find the cheapest deal. That is maybe 5% of the job and the easiest part.

Mortgage_Adviser

I believe the OP is a troll and the whole story is made up.

minimike2

Davina Hart, may I ask, what is your occupation?