Mortgage advisor fees

Sunnyseaside

When do you pay, one broker I spoke to said I would have to pay half after the aip. My question is what then if the mortgage is declined? And can I ask two brokers at same time to look for best offer 

ACG

Stick to one broker, you will find they both have different ways of working and make different recommendations - this can cause problems/stress. 

In terms of fees, it is down to agreement between you and the broker. We charge on offer, I know some who charge upfront, some charge on completion and others charge at different stages. 

Ask the broker what happens if the application gets declined and they are unable to get you a mortgage at a rate you are happy with. 

From the brokers perspective, they are charging for their time. There is also the risk that once you get the DIP you go direct and cut them out (it has happened to us). We charge on offer, but we ask our customers to sign a document that says if they pull out after the DIP, we reserve the right to charge an admin fee - it is more of a deterrent for the people looking to pump us for information and waste our time. I take the view that you come to us for a mortgage, so we only get paid if you get the mortgage - but I can see why brokers would charge upfront from past experiences, but I also understand why you would not be happy with that. 

K_S

@Sunnyseaside

All whole of market brokers have access to largely the same products. So there isn't much to be gained by pitting two brokers against each other so to speak. Use a broker and if you don't feel confidence in their abilities or don't trust them, then by all means get a second opinion or move on to a new broker.

Fees - As ACG said, there isn't industry practice as such, simply because there is far too much variety in borrower requirements and circumstances. I have worked in places where there was (normally) no fee, fee prior to application and fee upon offer.

I use the fee upon offer model most of the time. Sometimes upon application if it's a complex case or one where the client insists on taking a punt with a last ditch 50-50 case. And sometimes even pre-app, when the client shows signs of just pumping and dumping you. You get a sense of all this pretty quickly. In any case, I make the fee structure clear and transparent right at the outset, so the client can make an informed decision on whether to engage my services or not.

As a broker, my only request would be that if you absolutely don't want to pay a fee (which is not an unreasonable at all, this is after all a money saving site), consider using the likes of L&C, Habito, etc. I do get the occasional client who never intended to proceed to application and that's just a bit disrespectful as there's a lot of work to do and compliance requirements to meet before you can recommend a product to a client.

Good luck!

dunstonh

When do you pay

It varies with firms.  

one broker I spoke to said I would have to pay half after the aip. My question is what then if the mortgage is declined?

Look at their terms of business.  That is a required "what if" outcome that should be shown.

 And can I ask two brokers at same time to look for best offer 

There really isn't a need for that.

csgohan4

personal preference tbh, I prefer paid brokers to be paid on mortgage offer, i.e completion of their work you commissioned them to do. 

Free brokers are just that, but there are good ones out there who aren't conveyor belt firms.